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India shares fall to near six-week lows as rupee hits record low

Sino-US trade tensions also hurt regional equities

MUMBAI (NewsRise) -- Indian shares extended losses on Tuesday, ending at near six-week lows, as a falling rupee and global trade jitters weighed on investor sentiment.

The BSE Sensex fell 1.3% to 37,413.13, recording a more than 1% decline for two consecutive sessions for the first time since Nov. 2016. The broader Nifty 50 Index declined 1.3% to close at 11,287.50. HDFC Bank slid 2.1% to lead a gauge of private lenders lower by 1.4%. ICICI Bank fell 1.9% and index heavyweight Reliance Industries shed 1.5%.

The rupee fell to a fresh record low on Tuesday, hitting 72.75 against the dollar. It was last changing hands at 72.68 compared with 72.45 at close in the previous session. Increasing trade tensions between the U.S. and China, rising interest rates in the U.S., and concerns of sharp outflows from emerging markets have hurt investor appetite for equities.

Investors awaited further developments in Washington's ongoing spat with Beijing. U.S. President Donald Trump last week signalled his willingness to move ahead with additional tariffs on $200 billion of Chinese goods and a further $267 billion thereafter, thus imposing duties on all Chinese imports.

"Worries over a widening deficit due to rising oil prices and a weaker rupee have clouded investor's sentiment," said Vinod Nair, Head of Research at Geojit Financial Services. "The threat of trade tariffs, outflow of foreign funds, and concerns on domestic macros will influence investors to stay on a cautious note."

Among major decliners on the Sensex, fast moving consumer companies continued to lose ground amid concerns over their valuations. ITC dropped 2.9% and Hindustan Unilever slipped 1.2%.

Infosys climbed 0.3% to 734.25 rupees. UBS raised the target price on the software exporter to 865 rupees to reflect the earnings boost for the company from the Indian rupee's recent decline against the dollar.

Sun Pharmaceutical Industries fell 1.3%. Late Monday, the company said its unit had agreed to acquire 18.75% stake in Israel's Tarsius Pharma for $3 million.

ICICI Securities rose 0.2% to 327.30 rupees. Citibank initiated coverage on the company with a 'buy' rating and a target price of 425 rupees, saying it expected ICICI Securities to be a key beneficiary of a shift to financial avenues of savings by individuals.

HDFC Standard Life Insurance fell 1% to 445.90 rupees. CLSA maintained its 'buy' rating and 600-rupees target price, saying the company looked well placed to deliver 24% compounded annual growth in new premiums.

--Gurdev Singh Virk

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