NEW DELHI: Indian BSE (Bombay Stock Exchange) Senesex Index dropped 1.5 percent to 28,503.30 points.
Bharat Heavy Electricals, a power-equipment producer, was the worst performer on the S&P BSE Sensex, while Larsen & Toubro, the biggest engineering company, decreased for the fourth time this week. Sesa Sterlite completed a second weekly loss, leading metal producers lower.
Stocks slid on concern the United States Federal Reserve may signal earlier interest rate increases at its meeting next week. The measure’s valuation climbed to near a four-year high last week after the central bank cut rates for the second time this year and Prime Minister Narendra Modi’s first full-year budget outlined plans to spend more on infrastructure.
“The markets had become slightly overbought and frothy after the budget and the surprise rate cut by the RBI,” Dipan Mehta, a member of the BSE, told Bloomberg TV India on Friday. “Investors should factor in a 10 to 12 per cent correction from the peak.”
The Sensex has slid 5 per cent from a record intraday high of 30,024.75 reached on March 4. The gauge still trades at 15.9 times its 12-month estimated earnings, 10 percent premium to its three-year average, data shows.
Earnings per share for the 30 index companies dropped 2.5 per cent in the December quarter, the first decline since the three months ended June 2013, the data show.
The Indian rupee on Friday breached the 63-mark intraday against the Greenback and ended with a sharp loss of 47 paise at 62.97 on sustained dollar demand from importers amid weakness in local shares.
It crossed the 63-level after two months as it hit a low of 63.0025 on Friday. Previously, it had logged an intra-trade low of 63.20 on January 8, 2015. Besides dollar demand and weakness in share market, a firm dollar overseas also put pressure on the rupee, traders said.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced slightly lower at 62.52 a dollar from overnight close of 62.50 and touched a high of 62.43. Later, it surrendered early gains and plunged to a low of 63.0025 before ending at 62.97 — a fall of 47 paise or 0.75 per cent. On Thursday, it had gained 28 paise or 0.45 per cent. On a weekly basis, the rupee has tumbled by 81 paise or 1.30 per cent.
