* Shares drop on concerns of weak quarterly results
* Satyam climbs on better corporate governance hopes
* Reliance rises after unit starts giant refinery
(Updates to mid-morning)
MUMBAI, Dec 29 (Reuters) - Indian shares fell more than 1.5
percent on Monday on concerns of poor quarterly earnings and
tracking weak regional shares, but Satyam Computer Services
(SATY.BO) rose on better governance hopes.
Satyam, India's No.4 outsourcer, climbed as much as 6.1
percent to 143.70 rupees, after it said it would consider more
options to improve its business practices, including
strengthening corporate governance. [ID:BOM418185]
Its shares had plummeted 40 percent since a botched attempt
two weeks ago to buy two infrastructure firms in which
management held stakes. The shares opened weak and extended
losses to 4.4 percent before turning positive.
By 11:08 a.m. (0538 GMT), the 30-share main index fell
1.55 percent, or 141.69 points, at 9,237.35, after falling as
much as 1.7 percent. Twenty-four components were in the red.
"The major variable for Indian markets is the earnings
season, said Amitabh Chakraborty, president for equities at
Religare Securities. "While most of the poor numbers is already
priced in, investors fear there could be some bad surprises in
store."
The benchmark index has fallen 54.7 percent so far this
year as foreign funds pulled out $13.3 billion amid the global
credit crisis.
Banks and outsourcers led losses as these sectors are most
vulnerable to an economic slowdown and would be among the last
to recover when the tide turns, traders said.
ICICI Bank (ICBK.BO), India's No.2 lender, fell 1.7 percent
to 411 rupees and top lender State Bank of India (SBI.BO)
dropped 2 percent to 1,219 rupees.
IT bellwether Infosys Technologies (INFY.BO), which kicks
off the quarterly earnings parade on Jan. 13, slipped 3.1
percent to 1,075.15 rupees and top outsourcer Tata Consultancy
Services (TCS.BO) eased 0.87 percent to 468 rupees.
But energy group Reliance Industries (RELI.BO), the top
listed firm, bucked the trend to nudge up 0.65 percent at
1,219.20 rupees after its unit Reliance Petroleum RPET.BO
started processing crude at its 580,000 barrels per day
refinery last week.
Reliance Petroleum gained 2.8 percent to 87.15 rupees,
extending Friday's gain of 6.3 percent.
Hindalco Industries (HALC.BO) and Sterlite Industries India
Ltd (STRL.BO) moved up 0.5 percent and 1.8 percent respectively
after copper and aluminium prices rose globally.
"The outlook for next year, at least for the first three
months is turning positive as we believe low interest rates
will allow funds to narrow the gap between developed and
emerging markets," said Religare's Chakraborty.
In the broader market, 1,165 losers led 584 gainers on low
volume of 62.5 million shares.
The 50-share NSE index dropped 1.4 percent to
2,817.30.
STOCKS TO WATCH
* Bharat Forge Ltd (BFRG.BO) rose 2.6 percent to 81 rupees
after the auto components maker said its board had approved
issue of non-convertible debentures for 2.5 billion rupees to
Life Insurance Corp on private placement.
* Core Projects & Technologies Ltd (CORE.BO) rose as much
3.8 percent to 46.35 rupees after the firm said it bought a
unit of U.S.-based education company, The Princeton Review
(REVU.O), for $20 million.
* Private carriers such as Jet Airways (JET.BO), Kingfisher
Airlines (KING.BO) and Spicejet (SPJT.BO) were up 3 to 5.5
percent after a fall in jet fuel prices in India.
MAIN TOP THREE BY VOLUME
* Satyam Computer on 6.5 million shares
* Unitech (UNTE.BO) on 6.2 million shares
* Reliance Petroleum on 3.41 million shares
FACTORS TO WATCH
* Indian rupee drops as shares fall, outflow concerns
[INR/]
* Indian bond yields rise in light trading
[IN/]
* FOREX-Pound hits record low vs euro, Swiss franc gains
[FRX/]
* Oil jumps over 4 pct on Israel-Hamas violence
[O/R]
* GLOBAL MARKETS- S.Korean won hits 2-mth high, stocks slip
[MKTS/GLOB]
* Wall St Week ahead: 2008 could nail its spot as worst year
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Narayanan Somasundaram; Editing by Ranjit
Gangadharan)
