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Indian stocks fall marginally; Reliance gains
January 18, 2012 / 10:36 AM / 6 years ago

Indian stocks fall marginally; Reliance gains

* Sensex closes down 0.1 pct after choppy trading

* Reliance rises 5.1 pct after co says to consider buyback

* TCS falls 2.5 pct after results, IT rivals also slump

* Airlines rise after ministry gives nod to FDI (Updates to close)

By Henry Foy

MUMBAI, Jan 18 (Reuters) - Indian shares closed slightly lower on Wednesday after a day of see-sawing, as investors digested results from the country’s IT industry leader Tata Consultancy Services and a potential share buyback from heavyweight Reliance Industries.

Reliance, the country’s biggest company by market capitalization, closed up 5.1 percent at 779.75 rupees, after the cash-rich energy conglomerate said it would consider a share buyback on Friday.

The company, controlled by Mukesh Ambani, India’s richest man, saw its share price slump by around 35 percent in 2011. That helped to drag the benchmark index down 25 percent for the year, making India one of the world’s worst-performing markets.

“A fear of poor performances in the December quarter is weighing on the market,” said Nitin Khandkhar, founder of Nitin Khandkhar Institutional Research.

“Reliance obviously is a big weight in the opposite direction, but the headwinds from results are present.”

Tata Consultancy Services (TCS), India’s biggest software services provider, fell 2.5 percent to 1,076.15 rupees after analysts suggested a feared slowdown due to economic turmoil in Europe and the United States was starting to bite.

TCS met estimates with a 23 percent rise in net profit during the December quarter, but analysts cautioned on low revenue growth from its key financial services sector.

“While TCS is optimistic about the environment, management commentary indicated softness in business evidenced by delays in decisions,” wrote HDFC Bank in a research note on Wednesday.

Rivals Infosys, which cut its fiscal year revenue growth outlook last week due to the euro zone debt crisis, and Wipro, which reports its results on Friday, also fell on Wednesday.

Infosys shares closed down 1.9 percent at 2,612.05 rupees, while Wipro ended the day at 404.10 rupees, a fall of 2.7 percent.

The main 30-share BSE index ended down 0.09 percent at 1,6451.47 points, with 18 of its components falling.

Airlines stocks surged for a second consecutive day after the federal aviation ministry said late on Tuesday it would recommend that the government allow foreign carries to buy stakes of up to 49 percent in domestic players.

Jet Airways, India’s biggest airline, climbed 4.9 percent to 246.40 rupees, debt-laden Kingfisher Airlines ended the day up 1 percent at 25.35 rupees and SpiceJet closed at 22.90 rupees, a rise of 2.5 percent.

Essar Oil slumped as much as 20 percent in early trade after India’s Supreme Court passed a ruling late on Tuesday that means the refiner will no longer be able to defer payment of a sales tax.

The stock recovered some losses to close down 12.1 percent at 51.15 rupees.

Coal India shares fell as much as 4.3 percent after India’s coal minister said the world’s largest coal miner was not expected to raise its prices after finalising a wage hike agreement with workers this month.

The stock closed down 3.4 percent at 339.80 rupees.

The 50-share NSE index ended down 0.23 percent. In the broader market, losers outpaced gainers by a ratio of a little over 2 to 1 on total volume of about 761 million shares.

India’s shares had closed at a near 6-week high on Tuesday, as investors eyed a potential loosening of monetary policy by the country’s central bank on the back of an easing in inflation.

Automakers and developers, which have been hit hard by the increased cost of credit, posted strong gains on Tuesday. Top listed developer DLF and Hero MotoCorp, the world’s largest two-wheeled vechicle maker, continued to rise on Wednesday, closing up 1.7 percent and 1.8 percent respectively.

Markets across Asia steadied on Wednesday after sentiment improved on soothing economic data the day before, as focus returns to Europe with Portugal testing investor confidence in a debt sale and Greece resuming talks on its debt restructuring.

The MSCI’s broadest index of Asia Pacific shares outside Japan was up 0.5 percent at 1000 GMT, while Tokyo’s Nikkei average finished up 1 percent.

STOCKS ON THE MOVE

* Bharat Petroleum Corporation Ltd rose as much as 5.0 percent after the company said its natural gas discovery off the coast of Mozambique may hold 15 trillion to 30 trillion cubic feet of gas reserves.

* Reliance Infrastructure rose as much as 4.2 percent after the company said it has injected 5.2 billion rupees ($102.5 million) into two joint venture power projects in New Delhi.

* Bharat Heavy Electricals Ltd fell as much as 3.3 percent after Goldman Sachs downgraded the power equipment maker to “sell” from “neutral.”

STOCKS BY VOLUME

* Unitech at 32.6 million shares

* Sterling Biotech at 28.5 million shares

* Essar Oil at 24.8 million shares

FACTORS TO WATCH * Indian rupee report * Indian bond report * Euro struggles to keep gains ahead of Europe events * Brent rises above $112 on weak dollar, growth hopes * Shares steady ahead of Lisbon sale, Greek talks * Wall St rises but ends off highs as Citi sinks  * For closing rates of Indian ADRs ($1 = 50.7350 Indian rupees) (Editing by Aradhana Aravindan)

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 news Asia Macro data A multimedia version of Reuters Top News is available at: topnews.session.rservices.com

LIVE PRICES & DATA: World Stocks Currency rates Dow Jones/NASDAQ Nikkei FTSE 100 Debt Indian rupee LME price overview (Reporting by Henry Foy; Editing by Aradhana Aravindan)

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