* Weak European markets weigh on investor confidence
* Trading choppy; long-term investors look to buy at dips
* Reliance Infrastructure, Tata Power, NTPC drop; ICICI up
* Investors await U.S., European data, U.S. Fed meeting
(Updates to close)
By Pratish Narayanan
MUMBAI, June 22 (Reuters) - Indian shares fell 1.35 percent
on Monday as investors continued to take profits after a
three-month rally, with a weak start in European markets adding
to the sell-off.
Trading was choppy through the day as long-term investors,
who had missed an 80 percent rally since early March, bought at
dips and lifted the market up as much as 1 percent at one
stage.
Investors are cautious ahead of a flurry of economic data
and a U.S. Federal Reserve meeting this week, which they hope
will provide surer signs a global recovery is strong enough to
justify recent gains across world stock markets, analysts said.
"Global markets have become weak, and what we are seeing
today is typical profit-booking," R.K. Gupta, managing director
of Taurus Mutual Funds, said from New Delhi.
The World Bank raised its growth forecast for India, but
warned prospects for the global economy remained "unusually
uncertain" and lowered its 2009 growth forecasts for most
economies. [ID:nLM634869]
Energy giant Reliance Industries (RELI.BO) and state-run
explorer Oil and Natural Gas Corp (ONGC.BO) fell after the
Economic Times said the oil ministry was examining a proposal
to charge royalties on sale prices instead of wellhead value
that mainly excluded processing, storage and transport costs.
"There has been a lack of clarity about the issue in the
past few weeks. If the government is going to do this, it is
definitely going to hurt profits," Gupta said.
Reliance Infrastructure (RLIN.BO) dropped 4.3 percent to
1,207.60 rupees as investors cashed in profits after the stock
tripled in value since early March.
State-run NTPC Ltd (NTPC.BO), the country's top power
producer, and private sector Tata Power (TTPW.BO) were among
the major losers.
ICICI Bank (ICBK.BO) bucked the trend and rose 1.8 percent
to 726.90 rupees after the Mint newspaper said the bank aimed
to save up to $270 million in the current year that began in
April by trimming sales agents and other costs. [ID:nBOM479919]
The 30-share BSE index .BSESN ended down 195.67 points at
14,326.22 with 22 stocks declining. It climbed to as far as
14,668.40 and fell as much as 1.7 percent at one stage.
"Investors are undecided, and at the same time there is a
lot of liquidity chasing stocks," Gajendra Nagpal, chief
executive of Unicon Financial Intermediaries, said from New
Delhi.
"But the market has run up quite a bit already, and there
is no trigger for it to rise significantly to the next level,"
he said.
The index dropped 4.7 percent last week, after rallying 83
percent over 14 consecutive weeks in its best run in four
years.
Renewed jitters about the global economy and worries about
pricey stocks have dented investor confidence, while foreign
portfolio inflows have slowed in the past week after they
pumped in about $8 billion since early March.
But expectations for investor-friendly reforms from the
government when it announces its annual budget on July 6 have
provided support.
"July is going to be a critical month. Not only will the
budget be presented, but companies will come out with their
earnings figures as well," Taurus' Gupta said.
Reliance Industries, which has the most weight in the main
index, fell 4.3 percent to 1,952.45 rupees. The stock has faced
headwinds since last Monday, when the firm received an
unfavourable court ruling related to gas supplies.
[ID:nBOM433343]
ONGC slid 1.6 percent to 993.70 rupees. Tata Power dropped
4.9 percent to 1,107.40 rupees, while NTPC lost 3.6 percent to
191 rupees.
In the broader market, losers led gainers 1,512 to 1,116 on
relatively lower-than-average volume of 388.5 million shares.
The 50-share NSE index fell 1.8 percent to
4,235.25.
By 1036 GMT, the pan-European FTSEurofirst 300 .FTEU3
index of top shares was down 1.2 percent.
U.S. stock index futures pointed to a lower open on Wall
Street, as shares were poised to trim recent gains ahead of the
release this week of euro zone purchasing managers' surveys and
U.S. housing sector data, which is key for consumer spending.
MAIN TOP 3 BY VOLUME
* IFCI (IFCI.BO) on 24.7 million shares
* Unitech (UNTE.BO) on 16.5 million shares
* Ispat Industries (ISPT.BO) on 15.1 million shares
STOCKS THAT MOVED
* Steel-pipe maker Jindal Saw (JIND.BO) rose 4.7 percent to
382.95 rupees after it got orders worth over 10 billion rupees
($205.9 million) for supply of pipes to GAIL (India) (GAIL.BO),
Hindustan Petroleum Corp (HPCL.BO) and the Middle East.
* McNally Bharat Engineering Company Ltd (MCNL.BO) was
stuck at its upper limit of 4.95 percent at 109.1 rupees after
the company said it won an order worth 306 million rupees from
Paradip Port Trust in Orissa.
* Future Capital Holding (FCHL.BO) gained 4.7 percent to
256.20 rupees after its board approved raising additional funds
for expansion and strategic investments or acquisitions.
* ABG Shipyard (ABGS.BO) rose 3.3 percent to 209.40 rupees
after the shipbuilder posted a 13 percent rise in quarterly net
profit.
FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee eases on weaker stocks, stronger dlr
[INR/]
* Indian bond yields steady; borrowing cues eyed
[IN/]
* Euro falls ahead of ECB refi op; Fed awaited
[FRX/]
* Oil falls below $69 on stronger dollar, equities [O/R]
* World stocks and oil slip; dollar firmer [MKTS/GLOB]
* U.S. stock index futures signal losses; miners eyed
[.N] * For closing rates of Indian ADRs
INADR (Editing by Ranjit Gangadharan)
