Mumbai, July 15 : India's main share market index provisionally fell 5.38 per cent on Tuesday to its lowest close in more than 15 months, led by financials such as ICICI bank on fears of worsening global credit turmoil.
The banking sector index was down 5.1 per cent.
ICICI, India's No. 2 lender, fell as much as 6.2 per cent to 543.65 rupees, it's lowest since August 2006, and mortgage lender Housing Development and Finance Corp dropped five per cent to 1,836 rupees.
Although Indian banks have no direct exposure to the US sub prime mortgage sector, the global financial sector turmoil impacts sentiment in the local market and raises worries of more withdrawals by foreign funds.
According to market analysts the downward trend in the market is due to the prevailing political instability in the country.
"There are a lot of factor that are contributing to this volatility. Number one is the crude oil, the crude oil has been hovering between 135 to 146,147 a barrel because of which not only the Indian market but the global market is going up and down. Number two which is totally for the Indian context is our political situation in the country. July 22nd is going to be the vote of confidence, where the current government will be sitting for the vote and there has been a lot of sea-saw. At least from the media and from what we read. There has been a lot of horse-trading, you can say. Both the parties are trying to corner MP's (Member of Parliament) whichever way they want. This is again putting a speculation in the market whether the government will sail through or not," said Ankit Ajmera, Market Analyst.
The 30-share Bombay Stock Exchange (BSE) index provisionally ended down 717.74 points at 12,612.77, with all its components in the red.
The broader 50-issue National Stock Exchange (NSE) index provisionally fell 5.01 per cent to 3,837.20.