Indian stocks dropped, driving the benchmark index to its biggest decline in seven weeks, on concern the global economic recovery might falter and stall the three-month worldwide stock rally.
Reliance Industries, the country's largest fuels explorer, sank 4.3 per cent and engineering company Larsen & Toubro (L&T) lost 3.7 per cent after US President Barack Obama said that a full-fledged economic recovery might take a long time to come.
The Sensex, slid 435.07 points, or 2.9 per cent, to 14,522.84, its steepest drop since April 28. The S&P CNX Nifty Index on the National Stock Exchange fell 3.6 per cent, the most since March 30, to 4,356.15. The BSE 200 Index declined 3.4 per cent to 1,768.06. Nifty futures for June delivery lost 3.9 per cent to 4,340.
“People are worried after what the US president had to say on the economy,” said A Balasubramaniam, chief investment officer at Birla Sun Life Asset Management Co, which manages assets of about $11.8 billion. “Investors are also taking some money off the table after the rally. Probably, you may not see the kind of run we had in the last three months.”
Stocks in Europe and Asia fell today on concerns that stock prices have outpaced earnings growth and economic recovery may stall. The Europe Dow Jones Stoxx 600 was 1.5 per cent lower at 11 am in London. The Standard & Poor's 500 Index slid 1.3 per cent yesterday.
Reliance, which lost a gas dispute to Reliance Natural Resources on June 15, fell 4.3 per cent to Rs 2,051.35. L&T declined 3.7 per cent to a two-week low of Rs 1,468.85.
Metals fall
Sterlite Industries, the largest copper producer, slid 4.9 per cent to Rs 603.55, the lowest since May 27. Hindalco Industries, the No 1 aluminum producer, fell 5.2 per cent to Rs 94, while Tata Steel, the biggest producer of the alloy, declined 7.5 per cent to Rs 417.
Copper prices sank 1.4 per cent in the US as the Federal Reserve said industrial production eased in May. In London, a gauge of six metals dipped for a third day, its longest losing streak since February.
Overseas funds sold a net Rs 213 crore ($45 million) of Indian stocks on June 15, according to Sebi.
Investment firm Max India rose 0.8 per cent to Rs 230.35 after Chairman Analjit Singh said it might sell 23 per cent stake in its insurance venture to partner New York Life Insurance Co. Shares rose as much as 10 per cent earlier.
Realty major Sobha Developers gained 0.8 per cent to Rs 223.15 after its board approved raising Rs 1,500 crore in a share sale and lifted its foreign holding limit to 100 per cent.
