Sensex falls for second day; ITC, metals hit

MUMBAI (Reuters) – The BSE Sensex fell for a second straight session on Wednesday, led by declines in ITC Ltd(ITC.NS) on worries the government may ban sale of loose cigarettes, while metal stocks slumped, tracking falls in commodities on global growth concerns.

Falls also tracked lower global equities amid a slump in copper and oil prices after the World Bank cut its global growth forecast for this year, blaming sluggishness in the euro zone, Japan and some major emerging economies.

Global risk aversion amid concerns that the market is trading ahead of current earnings growth expectations is leading investors to shed some positions ahead of the Reserve Bank of India’s policy review and the budget next month.

“Markets look priced in or expensive in the current global setup,” said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.

Higher government expenditure is required in 2015 to revive the economy, he added.

The benchmark BSE Sensex fell 0.6 percent, while the broader Nifty lost 0.55 percent.

Slower-than-expected retail and wholesale price inflation in December is raising hopes for an early cut in interest rates to help the economy out of its longest phase of sub-par growth since the 1980s.

ITC fell 2.6 percent after the government proposed on Tuesday to amend the anti-smoking law following a panel’s recommendation to ban the sale of loose cigarettes.

Sesa Sterlite (SESA.NS) slumped 5.7 percent, while Hindalco Industries (HALC.NS) lost 5.5 pct, after copper futures, often considered a barometer of industrial demand, slumped to 5-1/2 year lows.

(Reporting by Abhishek Vishnoi; Editing by Prateek Chatterjee)

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