Sensex down 0.6%; Reliance Industries, banks fall

The BSE Sensex shed 0.6% on Monday as investors braced for a tighter monetary policy this week, which could pile more pressure on slowing corporate earnings.Weak Asian peers that were weighed down by worries over the global economy also added to the negative sentiment, traders said.

Reliance Industries fell 2.1% after the energy major said late on Friday it would buy Bharti Enterprises's stakes in two insurance joint ventures with France's AXA.

"The market is worried that the company was moving its focus away from its core business," said Ambareesh Baliga, chief operating officer at Way2wealth Securities.

"But this is a part of a much larger plan of being a full-fledged financial services provider."

At 10:59 a.m. (0529 GMT), the 30-share BSE index was down 0.6% at 18,158.59 points, with 23 components declining.

"It is going to be an eventful week," said R.K. Gupta, managing director of Taurus Mutual Fund, referring to advance quarterly tax that companies pay by June 15 and a widely expected rate rise by central bank on Thursday.

Most economists expect a quarter percentage point increase in rates, which would be the 10th hike in 15 months as the RBI fights stubbornly high inflation.

The wholesale price index is expected to have risen 8.70% in May from a year earlier, up slightly from the previous month, thanks to rising food and fuel prices, a Reuters poll showed.

The data, due on Tuesday, should help give clues on the central bank's policy moves.

Top lender State Bank of India was down 1.4% while rivals ICICI Bank and HDFC Bank slipped 0.7% each.

The 50-share NSE index was down 0.7% at 5,448.10.

Around 113 million shares were traded on the NSE, where gainers beat losers in the ratio of 2:1.

Infosys Technologies was down 0.8% after the No. 2 software services exporter on Saturday inducted four new members to its board and said its head of innovation had resigned.

The MSCI's measure of Asian markets other than Japan was down 0.9% while Japan's Nikkei dropped 0.8%.

STOCKS ON THE MOVE

A drop in global oil prices pushed state-run refiners higher. Hindustan Petroleum Corp, Bharat Petroleum Corp and Indian Oil Corp were up between 1.5% and 2.2%.

Brent slipped below USD 119 a barrel on growing investor concern about a slowdown in the United States and other industrialised economies combined with expectations that top exporter Saudi Arabia would increase output.

Jyoti Structures gained 1.6% to Rs 91.28 after the turnkey power projects contractor said its African unit has received two orders worth Rs 225 crores.

MAIN TOP THREE BY VOLUME ON NSE

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