US-listed shares of Indian companies fell in New York on Monday, following losses in the domestic market as high oil prices sparked inflation worries and dampened the outlook for further cuts in interest rates.
The BNY Mellon index of leading Indian ADRs fell 2.6% for their sharpest drop in a month and a half. ICICI Bank Ltd fell 4.1% to $36.06 and Infosys Ltd fell 1.5% to $58.72.
The main 30-share BSE index dropped 2.7% for its biggest fall in five months.
The Reserve Bank of India signaled last month that it was ready to cut rates to stimulate a flagging economy if there was a sustained decline in inflation, but the surge in oil prices casts a shadow over recent signs of moderating costs.
Brent crude prices pulled back on Monday after five straight higher settlements. Brent April crude fell $1.66 to $123.81 a barrel after settling at a near 10-month peak above $125 on Friday. Brent is up 11% in February. Much of the rise has been attributed to worries about the potential for a war between Iran and Israel.
"After a strong move higher in both the economic data and in equity markets over the last several months, the recent soft patch in the market, coincident with a sharp rise in oil prices, is disquieting and harkens back to last year's experience," Goldman Sachs said in a research note on Monday.
A spike in oil prices last year has been cited as one of the reasons behind the equity markets' mid-year slide.
The BNY Mellon index of leading American Depositary Receipts fell 0.6%. The Standard & Poor's 500 index rose 0.1% to a new high for the year.
HSBC Holdings Plc fell 3.6% to $43.95 in New York after the bank told reporters it would be a challenge to meet its 2013 target for reducing costs. It said a $1 billion increase in its wage bill in Brazil, China and other emerging markets was the price of avoiding stagnation.
The BNY Mellon index of leading European ADRs fell 0.8%, while the FTSEurofirst 300 index of top shares closed down 0.3% at 1073.81.
Transocean Ltd took a $1 billion charge related to the 2010 Gulf of Mexico oil spill, the clearest indication yet that the contract driller is preparing to settle the case. The stock fell 5.3% to $53.43.
The BNY Mellon index of leading Asian ADRs slipped 0.4% and the BNY Mellon index of leading Latin American ADRs fell 0.5%.
Finnish mobile phone maker Nokia unveiled a cheaper smartphone using Microsoft software as it aims to win back market share. But its shares, which had run up ahead of the release, fell 6.2% to $5.44, with some analysts saying the phone's price tag of 189 euros may still be too high.
