MUMBAI: Concerns over deficient rainfall playing spoilsport to a speedier revival of India’s economic growth weighed down investor sentiment on
Monday. Automobile shares led downsides on fears that a decline in income from lower agriculture output would reduce demand for two-wheelers and tractors. Rural India is a big market for automobile firms.

“The monsoon rainfall remains important for large sections of rural farm-based demand. This is because nearly 55% of the labour force is employed in agriculture and only 42% of the area under major crops is irrigated,” said Rajeev Malik, economist at Macquarie. BSE’s 30-share Sensex closed at 15,009.77, down 150.47 points, or 0.99%. NSE’s 50-share Nifty ended at 4437.65, down 43.75 points, or 0.98%.

Broking house Goldman Sachs has retained its FY10 GDP growth target at 5.8%, citing poor monsoon as a key negative. However, it has raised FY11 growth target to 7.8% from 6.6% “due to a much improved investment outlook”. FIIs net sold Indian shares worth Rs 640 crore, while domestic institutions were buyers to the tune of Rs 86 crore, according to provisional NSE trade date.

Brokers said the market has not reacted ‘too negatively’ to the swine flu, which has claimed six lives and affected over 850 people across the country. Cipla shares rose 3.2% to Rs 281.65, as the company manufactures Tamiflu, a drug used to cure swine flu.