Indian shares slip on fears, firmer USD

MUMBAI: Indian shares fell 1.25 per cent to their lowest close in a week on Thursday, as doubts about the pace of global recovery spooked world markets and a stronger dollar pushed investors away from riskier equities.

ICICI Bank, the country's No. 2 lender, and energy major Reliance Industries, which together account for more than a fifth of the main index, led the fall.
"Global economic doubts and the strengthening dollar are not good news for stocks globally and India is no exception," Jayesh Shroff, a fund manager at SBI Mutual Fund, said.

He expected market to stay volatile in the short-term but remained bullish in the mid- to long-term as liquidity, which has been driving markets, is still flush.
The 30-share BSE index fell
213.13 points to 16,785.65, its lowest close since November 12. All but three components fell.

The benchmark has risen about three-quarters this year, boosted by foreign portfolio inflows of $15.3 billion, but fresh doubts about the global economic recovery and a reviving dollar could push investors to other assets.

The dollar climbed further away from 15-month lows, forcing gold prices lower while global equities slipped from the top of their recent range. The dollar index, which tracks the currency against major currencies, was up nearly half a per cent.

A six-month low in US housing construction in October and news that Mitsubishi UFJ Financial Group, Japan's largest bank, will have to raise $11 billion in new shares to meet stricter capital requirements have underscored how the climb back from the worst economic crisis in generations will be slow.