Indian shares fall on earnings caution; ITC hits record high

Fri Oct 19, 2012 7:30am EDT

* BSE falls 0.58 pct; NSE falls 0.6 pct
    * Earnings misses hit Exide, Adani Power
    * ITC hits record on profit surge

    By Manoj Dharra
    MUMBAI, Oct 19 (Reuters) - Indian shares fell on Friday as
Reliance Industries extended a recent losing run on continued
worries about the outlook for its refining margins and as
recently outperforming financial stocks such as HDFC were hit by
profit-taking.
    However gains in ITC Ltd to a record high capped
broader losses after the cigarette maker posted a 22 percent
surge in July-September earnings despite the challenge of higher
taxes and tighter anti-smoking rules in several Indian states.
 
    Indian shares have struggled recently, with the BSE index
 down 0.4 percent this month after rallying 7.7 percent
in September, as the impact from the government's fiscal and
economic reforms fade.
    Investors are holding hope the Reserve Bank of India will
cut interest rates at its policy review on Oct. 30, although
most analysts expect only a token 25 basis point cut in the cash
reserve ratio, or the amount of deposits lenders must keep with
the central bank. 
    "For the week, the Sensex has ended lower on the back of
profit booking and absence of fresh triggers for the market,"
said Sanjeev Zarbade, Vice President of the Private Client Group
Research at Kotak Securities, in an emailed note.
    The BSE index fell 0.58 percent, or 109.62 points, 
to 18,682.31. The index, also known as Sensex, rose 0.04 percent
for the week.   
    The 50-share NSE index lost 0.6 percent, or 34.45 
points, to 5,684.25, but added 0.14 percent for the week.
    Earnings have been a key driver of share performance.
    Reliance Industries fell 1.05 percent, bringing
its losses to 2 percent for the week, on worries about whether
the energy conglomerate can sustain the rebound seen in its
refining margins for the July-September quarter out on Monday. 
    Battery maker Exide industries shares slumped 8.9
percent after profit and margins missed market estimates as
higher costs dented operating performance. 
    Adani Power Ltd dropped 2.4 percent after swinging
to a July-September net loss of 2.6 billion rupees from a 1.7
billion profit a year ago. 
    Bank shares fall on profit-taking: ICICI Bank lost
0.7 percent after gaining 18 percent since the end of August to
Thursday's close, outperforming an NSE index that gained 8.75
percent during the same period.
    HDCF Bank lost 1.2 percent, while mortgage lender
HDFC declined 1.1 percent.
    Shares in Kingfisher Airlines dropped 4.6 percent
ahead of a deadline of Oct. 20 to respond to India's civil
aviation authorities on why its license should not be cancelled.
 
    However, among gainers, shares in ITC rose 2 percent, after
earlier hitting a record 299 rupees. The tobacco firm's higher
cigarette prices protected margins from stagnant volume growth.
 
    Shares in jewellery companies, gained on hopes of a spike in
jewellery sales ahead of the festive season in India, when
consumer spending appetite traditionally increases. 
    Shree Ganesh Jewellery gained 8.9 percent while 
Tribhovandas Bhimji Zaveri Ltd gained 10.9 percent.
    
    FACTORS TO WATCH                                            
* Euro hits 1-month high, uncertainty may check gain      
* Brent oil slips as global economy worry persists         
* Euro gains as Spain dodges rating downgrade        
* Foreign institutional investor flows          
* For closing rates of Indian ADRs                       
                    
   ASIA-PACIFIC STOCK MARKETS:                                  
Pan-Asia........ Japan.......   S.Korea... 
S.E. Asia.......        Hong Kong...  Taiwan.... 
Australia/NZ....        India.......  China..... 
                     
   OTHER MARKETS:                                               
Wall Street ....         Gold ....... Currency.. 
Eurostocks.....         Oil ........  JP bonds... 
ADR Report .....       LME metals. US bonds.. 
Stocks News US.. Stocks News Europe     
                    
   DIARIES & DATA:                                              
Indian Data Watch   Asia earnings diary 
U.S. earnings diary     European diary       
Indian diary          Wall Street Week Ahead  
Eurostocks Week Ahead                                   
                      
   TOP NEWS:                                                    
   For top Asian company news, double click on:       
   U.S. company news  European company news  
   Forex news        Global Economy news  
   Technology news  Telecoms news        
   Media news       Banking news           
   Politics/General    Asia Macro data       

ZL.NS> rose 10.9 percent.
    
FACTORS TO WATCH                                             
* Euro retreats with Spain rescue details elusive         
* Oil edges up near $113 but rise in supply eyed           
* Spanish, Italian bond yields fall after EU summit  
* Foreign institutional investor flows          
* For closing rates of Indian ADRs                       
                    
   ASIA-PACIFIC STOCK MARKETS:                                  
Pan-Asia........ Japan.......   S.Korea... 
S.E. Asia.......        Hong Kong...  Taiwan.... 
Australia/NZ....        India.......  China..... 
                     
   OTHER MARKETS:                                               
Wall Street ....         Gold ....... Currency.. 
Eurostocks.....         Oil ........  JP bonds... 
ADR Report .....       LME metals. US bonds.. 
Stocks News US.. Stocks News Europe     
                    
   DIARIES & DATA:                                              
Indian Data Watch   Asia earnings diary 
U.S. earnings diary     European diary       
Indian diary          Wall Street Week Ahead  
Eurostocks Week Ahead                                   
                      
   TOP NEWS:                                                    
   For top Asian company news, double click on:       
   U.S. company news  European company news  
   Forex news        Global Economy news  
   Technology news  Telecoms news        
   Media news       Banking news           
   Politics/General    Asia Macro data       



 (Editing by Rafael Nam)
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