December 27, 2001	Thursday	Shawwal 11, 1422

MUMBAI, Dec 26: Indian financial markets weakened on Wednesday amid growing fears that a war of words and cross-border skirmishes with Pakistan could escalate into war.

The Indian rupee ended at a five-week low, shares closed near six-week lows while bonds lost more than a rupee as investors took fright.

The Bombay exchange’s top-30 share benchmark index ended down 1.77 per cent at 3,175.86 points, swinging between a rise of 0.93 per cent and a decline of 1.94 per cent. It is the marker’s lowest close since mid-November.

The rupee closed at 48.0325/0525 per dollar, off an intra-day low of 48.075, but weaker than Monday’s close of 47.9150/9250.

The rupee closed weaker than 48 per dollar for the first time since November 23. It has shed around 0.6 per cent in the last four sessions, reversing a month long firming trend.

Bonds were weak as well as traders fretted about the impact that additional expenditure would have on a cash-strapped government.

An economic slowdown has dented the government’s revenue projections and analysts fear that any additional expenditure would have to be through fresh borrowings.

The benchmark 10-year bond yielded 8.35 per cent in Wednesday evening deals, up from 7.93 per cent ahead of the attack on parliament.—Reuters