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Indian shares fall for the 4th day; banks lead decline
March 20, 2013 / 11:31 AM / 5 years ago

Indian shares fall for the 4th day; banks lead decline

* BSE ends 0.65 pct down; NSE 0.9 pct lower
    * Govt says can still pass reforms, but silent on early

    By Manoj Dharra
    MUMBAI, March 20 (Reuters) - Indian shares fell for a fourth
day to a two-week closing low on Wednesday on continued worries
after a regional party withdrew from the ruling coalition, and
due to lingering doubts about how aggressively the central bank
will cut interest rates this year.
    Lenders such as ICICI Bank Ltd and State Bank of
India led the decline, although defensive stocks such
as Hindustan Unilever Ltd gained.
    Shares fell even after the Indian government said on
Wednesday it was still able to pass reform legislation in
parliament, which failed to address investor concerns about the
prospect of early elections or stalling reforms. 
    The slew of negative developments is raising concerns about
foreign investor flows, which had played a critical role in the
strong gains in domestic shares last year.
    "Political instability causes a great amount of
discontinuity which is not conducive for the markets," said
Paras Adenwala, Managing Director & Principal Portfolio Manager,
Capital Portfolio Advisors.
    "I am quite concerned about what would happen to all the
reforms and bills promised earlier," he added.
    The benchmark BSE index fell 0.65 percent, or
123.91 points, to 18,884.19, its lowest close since March 4. 
    The broader NSE index fell 0.9 percent, or 51.55
points, to 5,694.40.
    Bank shares extended declines after the Reserve Bank of
India stuck to a cautious tone on monetary policy, even after
cutting interest rates by 25 basis points for the second time
this year.
    ICICI Bank fell 3.01 percent, while Axis Bank 
dropped 1.7 percent. Shares in both lenders have fallen 9.8
percent and 4 percent each in four sessions, after an
independent journalist accused the banks of money laundering
practices. State Bank of India shares fell 3.8 percent.
    Among other decliners, Bharti Airtel Ltd shares
ended 4.55 percent lower after its chairman was ordered on
Tuesday to appear in court in a case over alleged corruption in
allocating mobile phone bandwidth more than a decade ago.
    Shares in Zee Entertainment Enterprises Ltd fell
5.35 percent after Goldman Sachs downgraded the television
broadcaster to "neutral" from "buy", saying the stock appeared
"fairly valued" given the macro headwinds that could hurt
advertisement spending. 
    Shares in Housing Development and Infrastructure Ltd
(HDIL) ended 20 percent lower after local credit agency
Credit Analysis and Research Ltd (CARE) downgraded the
real estate developer's debt, citing "delays in servicing"
    HDIL later said in a statement it had not accepted the
rating assigned by CARE. It said it reiterated the company's
strong financial and operational performance and sound
    Shares in Manappuram Finance Ltd closed 13.5,
percent lower, after the company said on Tuesday it expects an
"under recovery" of revenue on certain gold loan portfolios due
to a correction in gold price. 
    However, broader losses were capped as defensive shares
gained. Hindustan Unilever gained 3.34 percent, while
Cipla ended 1.6 percent higher.
 FACTORS TO WATCH                                             
* Euro steadies but vulnerable to Cyprus concerns        
* Oil rises from three-month low to $108                  
* Euro, stocks edge up on Cyprus containment hopes  
* Foreign institutional investor flows          
* For closing rates of Indian ADRs                       
   ASIA-PACIFIC STOCK MARKETS:                                  
Pan-Asia........ Japan.......   S.Korea... 
S.E. Asia.......        Hong Kong...  Taiwan.... 
Australia/NZ....        India.......  China..... 
   OTHER MARKETS:                                               
Wall Street ....         Gold ....... Currency.. 
Eurostocks.....         Oil ........  JP bonds... 
ADR Report .....       LME metals. US bonds.. 
Stocks News US.. Stocks News Europe     
   DIARIES & DATA:                                              
Indian Data Watch   Asia earnings diary 
U.S. earnings diary     European diary       
Indian diary          Wall Street Week Ahead  
Eurostocks Week Ahead                                   
   TOP NEWS:                                                    
   For top Asian company news, double click on:       
   U.S. company news  European company news  
   Forex news        Global Economy news  
   Technology news  Telecoms news        
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   Politics/General    Asia Macro data      <ECONASIA 

 (Additional reporting by Abhishek Vishnoi; Editing by Anupama

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