Indian shares edge lower as new import tariffs set in; financials drag

  • Reuters
  • Stock Market News
Indian shares edge lower as new import tariffs set in; financials drag
Credit: © Reuters.

* NSE index down 0.31 pct, BSE index trades 0.16 pct lower

* Markets in downtrend, NSE could fall to 10,500 - analyst

* Aviation stocks lose on ATF import duty hike

By Arnab Paul

Sept 27 (Reuters) - Indian shares edged lower on Thursday as the sentiment remained cautious after the government raised import tariffs on select goods and the central bank announced measures to ease liquidity concerns.

Investors also remained jittery ahead of derivatives expiry for September.

The broader NSE index .NSEI was down 0.31 percent at 11,019.5 as of 0552 GMT, while the benchmark BSE index .BSESN was trading 0.16 percent lower at 36,482.63jet.

The Indian government raised import tariffs on 19 "non-essential items," marking a further tilt toward protectionism as it tries to reduce its widening current account deficit and tackle a sharp slide in the rupee. Reserve Bank of India eased mandatory cash requirement rules for banks and assured jittery markets it would provide "durable liquidity" amid growing worries of a potential credit crunch in the economy. analysts say that though these measures are critical in the long run, the markets may not immediately reflect the changes.

"Markets are in a downtrend, expect support levels for NSE at 10,800 but if that breaks, it could slide to 10,500," said Anupam Singhi, chief operations officer, Marketsmith India, a part of investment advisory William O'Neil India.

"At the moment people are reducing their weights in financials, people are very cautious about this segment after what has happened and people need to see that there are no more bad news coming out of it."

There was some respite on the currency front, as the Indian rupee INR=D2 opened stronger at 72.42 compared to Wednesday's close of 72.63.

Asian shares traded slightly lower after the U.S. Federal Reserve raised interest rates by 25 basis points on Wednesday on expected lines and forecast that the U.S. economy would enjoy at least three more years of growth. MKTS/GLOB

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.08 percent.

Indian airline stocks InterGlobe Aviation Ltd INGL.NS , SpiceJet Ltd SPJT.BO and Jet Airways (India) Ltd JET.NS fell 4 percent - 6 percent due to a hike in aviation turbine fuel import tariff.

Private-sector lenders ICICI Bank Ltd ICBK.NS and Yes Bank Ltd YESB.NS dragged the NSE, falling 1.5 percent and 5.7 percent, respectively.

Among gainers, JK Tyre and Industries Ltd JKIN.NS , CEAT Ltd CEAT.NS and Apollo Tyres Ltd APLO.NS rose between 3.40 percent and 12 percent, respectively, on the back of increased import duty on radial car tyres.

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