Mumbai - Arabstoday
Indian shares eased for a second day yesterday as risk appetite waned on slowing growth concerns and accelerating food inflation meant more upward pressure on interest rates. Data showed car sales in India rose 7 per cent in May, their slowest pace of growth in two years, and analysts expect a further decline in momentum as higher fuel prices, interest rates and vehicle costs crimp demand. The food price index rose an annual 9.01 per cent in week to May 28, government data showed yesterday, up from 8.06 per cent in the previous week. Financials led the losses as the data comes ahead of the central bank\'s policy review on June 16, when it is expected to raise rates for the tenth time in 15 months. The 30-share BSE index slipped 0.05 per cent or 9.39 points to 18,384.90, with 19 components closing in the red. \"The market is in a state of limbo. It does not have any trigger right now,\" said Gajendra Nagpal, CEO of Unicon Financial. The 50-share NSE index fell 0.1 per cent to 5,521.05. Declining shares beat advancing ones in the ratio of 1.3 to 1 on a volume of 436 million shares on the NSE, lower than its 90-day average daily volume of 616 million shares. State-run refiners Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum fell by nearly 1 to 2.4 per cent after sources said on Wednesday the government had again deferred a decision on raising prices of diesel, kerosene and cooking gas. \"If government does not raise prices it is not sustainable for us. We were hoping that Opec will raise output but that has not happened so we are in a difficult position,\" said R.K. Singh, chairman of BPCL. \"The government has to either raise prices or give us higher compensation. Our borrowings are rising by Rs20-Rs25 billion a month. It will be difficult to sustain.\" Leading lender State Bank of India shed 1.4 per cent, while rival ICICI Bank dropped 0.1 per cent. HDFC Bank bucked the trend and closed 0.3 per cent higher. From / Gulf News