India shares fall on heavy selloff

Reuters -
Bangalore: Indian shares fell 0.48 per cent on Monday, surrendering early gains as investors freed up cash to invest in large share sales, with losses led by telecom firm Bharti Airtel Ltd and lender ICICI Bank Ltd.

Market sentiment was also dented by falls in foreign markets on growing fears of a recession in the United States. Asian stocks remained pinned at more than three-week lows, while European shares also dipped in early trade.

ICICI Bank, India's second-largest bank, fell 2.2 per cent to Rs1,408.50, having risen to a record of Rs1,465 in early deals, as investors booked gains after the stock had risen more than 12 per cent last week on its plans to list a number of its units.

Leading mobile operator Bharti fell 6.1 per cent to Rs907.30, its lowest close since December 19, after second-ranked Reliance Communications got additional spectrum to start GSM services in 14 of India's telecom zones.

Reliance Communications, which mainly runs on the rival CDMA platform but also has services on dominant GSM technology, ended up 1.5 per cent at Rs805.15.

The benchmark 30-share BSE stock index ended down 99.40 points at 20,728.05, with 19 components losing ground. It had risen as much as 0.63 per cent in the early trade.

The index hit a record 21,206.77 last Thursday.

"We are seeing only sector-specific action on hopes of good quarterly results. You will see momentum picking up after the Reliance Power IPO process gets completed," said Anuj Anandwala, research analyst with KJMC Capital Market Services Ltd.

Traders said there could be a temporary shortage of cash to buy stocks as investors free up funds for Reliance Power's initial public offer to raise up to $3 billion, which opens today.

"When such large issues hit the market, people tend to book profit to invest in the IPO," said DD Sharma, vice-president at Anand Rathi Securities.

"With global cues also not supportive, I expect the market to remain weak in the short term."