Indian Shares Tumble On US Rate-hike Worries

(RTTNews) - The Indian markets fell sharply on Monday after Federal Reserve Chairwoman Janel Yellen hinted that it would be appropriate to raise interest rates at some point this year, as long as economic activity picks up. U.S. bond yields rose and the dollar strengthened against major rivals on the back of Friday's better-than-expected U.S. inflation data, reigniting fears of capital flight.

The rupee was trading down by 10 paise at 63.62 per dollar in the afternoon session on sustained demand of the greenback from banks and importers.

The benchmark index BSE Sensex fell 313.62 points or 1.12 percent to 27,643.88, while the broader Nifty index dropped 88.70 points or 1.05 percent to close at 8,370.25.

Canara Bank slumped 5 percent on disappointing Q4 results. ITC plunged almost 4 percent after the country's largest cigarette maker posted a weak set of numbers for the March quarter due to a fall in volumes amid a government push to discourage tobacco consumption.

Among the other prominent decliners, Tata Motors, Grasim, Cipla, HDFC, GAIL, Tata Steel, Vedanta, Ambuja Cement and Tech Mahindra fell 2-5 percent.

Tata Power dropped 1.3 percent, while Lupin gained 1.2 percent. Shares of the drugmaker will soon replace the private sector electricity producer with effect from June 22, the BSE said in a statement.

Essar Oil rallied 3.3 percent before unveiling its March quarter results later in the day. Oil firms BPCL and ONGC rose 1-2 percent after oil prices fell sharply on Friday amid a resurgent dollar and persisting concerns over global supply glut.

On the global front, the other Asian markets rose broadly despite weak cues from Wall Street on Friday. A weaker yen and encouraging trade figures underpinned investor sentiment in Japan and higher iron ore prices boosted resource stocks in Australia, while Chinese shares rallied for a fifth straight day after Beijing invited private players to boost infrastructure investment and help stabilize growth. The South Korean and Hong Kong markets were closed for the Buddha's Birthday holiday. The European markets fell in thin holiday trading after a Greek official said the country may be unable to make a 300 million euro repayment to the International Monetary Fund on June 5 unless there is a deal with creditors.

Trading remained light as many markets across the region, including the United Kingdom, the United States and Germany were shut for holidays.