Shares drop 0.7 pc; earnings awaited | business | Hindustan Times
Today in New Delhi, India
Apr 24, 2017-Monday
New Delhi
  • Humidity
  • Wind

Shares drop 0.7 pc; earnings awaited

business Updated: Oct 12, 2010 16:42 IST

Indian shares fell 0.7 per cent on Tuesday, weighed down by disappointing factory output data and traders said all eyes were now on corporate earnings parade that starts this week.

Weak global markets and a large initial public offering that opens next week, which could suck cash away from the secondary market, also kept investors wary.

Energy conglomerate Reliance Industries dropped 1.4 per cent and contributed the most to the losses in the main
index. The stock has been a laggard this year in the absence of immediate triggers to boost earnings.

The 30-share BSE index ended down 0.67 per cent, or 136.55 points, at 20,203.34 points, with 22 of its components closing in the red.

Data on Tuesday showed annual industrial output growth plummeted to single-digits for August, mainly on a contraction in capital goods and consumer non-durables, easing pressure on the central bank to raise rates again in November.

Factory output grew 5.6 per cent in August from a year earlier, well below the median forecast in a Reuters poll of 9.65 percent.

But analysts cautioned that the wild swing in figures between July and August may hide the fact that growth was still steady.

"The growth was disappointing but it seems to be filling the gaps after the growth in the month before. I wouldn't read much into it," said Ambreesh Baliga, vice-president of Karvy Stock Broking.

He said the September quarter earnings, which will be kicked off on Friday by No. 2 outsourcer Infosys Technologies, would portray a better picture.

"My concern is we have discounted all positives, but have not made any provisions for negative surprises," he said.
The benchmark BSE index is up 15.7 per cent so far this year, with foreign funds pouring an unprecedented $21.4 billion
into Indian equities since the start of January.

The inflow has picked up pace over the past six weeks on optimism about India's economic growth, while the developed world struggles to head off a slowdown.

Traders said an IPO by state-owned Coal India Ltd, the world's largest coal miner, which opens on Monday could also draw away investor funds.

The IPO is likely to fetch $3.5 billion, more than initially estimated, a Reuters poll of 11 fund managers showed.

Financials eased as investors booked profits. The banking sector index shed 0.4 per cent, but is still up more than 41 percent in the year to date.

Leading lender State Bank of India shed 0.8 per cent while rival HDFC Bank dropped 0.1 per cent. Mortgage firm Housing Development Finance Corp fell 1.8 per cent.

Vehicles maker Tata Motors raced 1.3 per cent after the Economic Times reported it was planning to launch a new car aimed at taking on Alto manufactured by leading car maker Maruti Suzuki India. Maruti Suzuki shed 0.1 per cent.

Engineering and construction firm Larsen & Toubro declined 1.9 per cent. The stock has gained 19 per cent so far in 2010.

Metal makers dropped as base metal prices fell in London.