BSE Sensex falls for sixth straight session

MUMBAI (Reuters) – The BSE Sensex dropped 1.83 percent on Wednesday, taking its fall to 16.7 percent over a six-day losing streak, as worries over the deteriorating global economy saw the market surrender initial gains.

Losses in financial sector stocks led the main index to its third-lowest close of 2008. ICICI Bank dropped 3.6 percent, HDFC Bank fell 3.3 percent and mortgage lender Housing Development Finance Corp lost 3.7 percent.

A slide in the rupee to three-week lows near 50 per dollar provided little comfort to outsourcers as investors worried that a contracting global banking sector would cut back spending on their services.

Sector leader Tata Consultancy Services fell 0.4 percent, Infosys Technologies lost 0.8 percent, Wipro slid 3.2 percent and Satyam Computer dropped 3.6 percent.

Reliance Industries, India's most valuable company, fell 0.66 percent at 1,133.15 rupees, after rising 7 percent in morning trade.

"Nothing could really help sustain gains. Global cues are too bad for any good news to help our market," said Mehul Dedhia, assistant vice-president for sales at Sharekhan.

The 30-share BSE index rose as much as 3.3 percent in morning trade, but turned down and closed 163.42 points lower at 8,773.78, with 25 components losing ground.

It was the lowest close since Oct. 27, the day the market hit a three-year low of 7,697.39. The index has fallen 57 percent this year.

In the broader market 1,731 losers outweighed 777 gainers on volume of 240 million shares.

The 50-share NSE index fell 1.79 percent to 2,635.00, its lowest close since Oct. 27.

Traders said low volumes indicated investors were avoiding taking large positions on fears the market would slip further.

"There is a risk that we could touch the previous low. But the fall has been gradual this time, so there may be an opportunity to buy at lower levels," said Amit Khurana, head of institutional equities at Collins Stewart.

"There is money waiting to come in."

Foreigners have sold a net $13.1 billion of shares this year, after buying a record of more than $17 billion in 2007.

Among the few gainers, top car maker Maruti Suzuki rose 0.7 percent to 516.50 rupees after its chairman said 2008/09 production and sales was not expected to fall below the previous year's levels.


STOCKS THAT MOVED

* Ess Dee Aluminium rose 8.9 percent to 145.05 rupees after the Economic Times reported its acquisition of India Foils has been approved by the Board of Industrial and Financial reconstruction. The company is scheduled to hold a news conference later in the day.

* Kalindee Rail Nirman (Engineers) Ltd rose 5.3 percent to 141.1 rupees after stock exchange data showed L&T Capital Co Ltd raised its stake in the company to 13.9 percent.

* MindTree Ltd ended 2.0 percent down at 240 rupees after it said it expected revenue growth in 2009/10 to be challenging in view of the global economic slowdown.


MAIN TOP THREE BY VOLUME

* Suzlon Energy on 16.4 million shares

* GVK Power & Infrastructure on 11.1 million shares

* Reliance Natural Resources on 9.1 million shares