By Krishna V Kurup
(Reuters) - Indian shares fell on Monday, dragged by energy stocks such as Indian Oil Corp Ltd (IOC) and Bharat Petroleum Corp Ltd (BPCL) which declined on reports the refiners may buy stakes in GAIL (India) Ltd.
IOC and BPCL may buy 26 percent each in gas utility GAIL, the Economic Times reported citing the Press Trust of India, adding that the companies would pay the government over 200 billion rupees ($3.08 billion) each to become integrated energy firms.
Analyst say the deal will have negative implications for BPCL and IOC as it will saddle them with more debt in addition to what they already carry on their balance sheets.
Shares in both IOC and BPCL dropped over 4 percent each, with IOC hitting its lowest since January 2017.
The broader NSE Nifty was 0.52 percent lower at 10,141.80 as of 0618 GMT, while the benchmark BSE Sensex dropped 0.39 percent to 33,048.18.
"The likelihood of a very strong rebound from the recent correction looks unlikely," said Dhananjay Sinha, Head of Research, Economy and Strategy at Emkay Global Financial Services.
"There are two factors relevant now that will impact retail flows - country's political landscape and how it pans into policymaking and market sentiment, and secondly, the aspect of tightening of liquidity and rising yields," Sinha said.
Metal stocks took a beating with the Nifty metal index dropping 2.8 percent for a fourth consecutive session of losses.
Chinese iron ore fell 4 percent to its lowest since November as high inventory levels and a weak domestic steel market weighed on prices.
Steel Authority of India Ltd shed 6.7 percent, while Tata Steel Ltd lost 3.1 percent.
Financial and IT shares also declined with ICICI Bank Ltd and Infosys Ltd shedding over 1 percent each.
Meanwhile, Asian shares were weak as investors stayed cautious in a week when the Federal Reserve is likely to hike U.S. interest rates and perhaps signal that as many as three more lie in store for the rest of the year.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.34 percent lower.
($1 = 65.0200 Indian rupees)
(Reporting by Krishna V Kurup in Bengaluru; Editing by Sunil Nair)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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