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India shares fall for seventh day as selloff from foreign investors continues

Reliance Industries, Adani Ports lead losses on Sensex

MUMBAI (NewsRise) -- Indian shares fell for a seventh day on Wednesday, the longest losing streak in nine months, as foreign investors continued to sell the nation's equities amid a falling rupee.

The benchmark BSE Sensex index declined 1.4%, or 439.95 points, to 31,159.81, while the broader Nifty 50 closed 1.4% lower, or 135.75 points, at 9,735.75. Index heavyweight energy-to-telecom conglomerate Reliance Industries lost 2.5%, while private lender ICICI Bank slipped 2.3%. Adani Ports and Special Economic Zone suffered the biggest fall of 4.9% on the index.

"Heavy selling by foreign institutional investors, rising crude oil prices, and the weakening rupee hurt markets. The news of Indian Army's surgical strike on insurgents along the Myanmar border also added heft to the negative sentiment," said Akash Jain, vice president for equity research at Ajcon Global Services. "Correction in the market is expected until global factors stabilize."

On Wednesday, the Indian Army struck Naga insurgent hideouts along the Indo-Myanmar border retaliating against firings from the rebels, the Army said in a statement.

Foreign portfolio investors remained net sellers for a second straight month in a row. They have net sold shares worth more than $1 billion so far in September until Tuesday. The Indian rupee today fell to a more than six-month low against U.S. currency, ending Mumbai trading at 65.71 to a dollar.

Asian shares ended mixed on Wednesday. The U.S. Federal Reserve chief's comments sparked expectations of a December rate hike, while geopolitical tensions between the U.S. and North Korea further escalated. The Nikkei Asia300 tracking influential companies out of Japan ended about 0.1% down.

Twenty eight of the 30 Sensex constituents fell Wednesday, while overall declining issues outnumbered the advancing ones 2,010 to 539, and 129 remained unchanged.

Shares of ICICI Lombard General Insurance Co., a unit of India's top private lender ICICI Bank, made a tepid debut on bourses on Wednesday. It ended up 3.1% at 681.55 rupees, after falling below the issue price of 661 rupees in early trade.

Tata Consultancy Services, India's biggest software exporter, rose 0.6% amid bets that a weaker rupee would help boost profits. However, rival Infosys lost 0.9%.

Shriram Transport Finance climbed 4.2%, while IDFC fell 2.5%. IDFC and the Shriram Group have decided to abandon their merger plan, according to The Economic Times newspaper.

Divi's Laboratories plummeted 11.6% to 850.15 rupees. The U.S. Food and Drug Administration issued six observations for its plant located in southern India, CNBC-TV18 reported.

Other pharmaceutical stocks too fell. The nation's largest drug maker Sun Pharmaceutical Industries and second-ranked Dr. Reddy's Laboratories ended down 2.5% each, while third largest Lupin lost 0.7%.

State-owned Oil India gained 0.1% to 349.45 rupees. Jefferies recommended buying the stock with a target price of 465 rupees on rising Brent crude prices.

--Nivedita Naidu

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