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Indian shares slump to close down 3.25 percent

MUMBAI: Indian shares tumbled to close down 3.25 percent on Monday, hit by Wall Street’s plunge which was triggered by surging oil prices and a sharp jump in US unemployment, dealers said.

The benchmark Mumbai 30-share Sensex index closed down 506.08 points at 15,066.10, its second straight trading day of losses.

“Weak global clues, rising oil prices and concerns about (local) monetary tightening spooked investors. We advise investors to stay on the sidelines,” said Apurva Shah, head of research at brokerage Prabhudhas Lilladher. Concerns that India’s central bank may hike borrowing costs or take other steps to slow lending in a bid to curb inflation — running at more than eight percent — had also hurt sentiment, dealers said. Last week, the government hiked petrol and diesel prices to cut huge losses at state-run oil firms, which sell fuel at below cost to help the poor. India imports 70 percent of the oil needed for its fast-growing economy.

The Sensex has fallen 25.73 percent this year, on overseas funds sales worth $4.62 billion of Indian shares by last Friday. Foreign funds bought $4.17 billion worth during the same period last year. In 2007, India’s stock market rose 47.1 percent, the largest climb in four years, driven by record foreign investment of $17.23 billion. afp

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