Indian shares fall on growth worries
Tuesday, 10 January 2012
MUMBAI, Jan 9 (Reuters): Indian shares fell 0.22 per cent Monday as investors sold on concerns sluggish economic growth would dent corporate earnings due to higher costs and interest rates.
Prime Minister Manmohan Singh Sunday said the Indian economy would likely withstand an uncertain external environment to grow about 7 per cent this fiscal year, lower than the government's revised forecast of about 7.5 per cent last month.
"The investor sentiment was negative right from start. But despite of prime minister's comments, the market has not fallen in a big way," said RK Gupta, managing director at Taurus Mutual Fund.
"There could be some positive trend in the market if we see good numbers from industrial production and Infosys earnings awaited later this week."
Infosys, the country's second largest software exporter, will kick off the October-December earnings Thursday.
Shares of Energy major Reliance Industries led Monday's losses with a 1.2-per cent fall, followed by top telecoms company Bharti Airtel that declined 3.16 per cent.
Royal Bank of Scotland has downgraded Bharti and Idea Cellular to hold from buy, and Reliance Communications to sell from hold, citing greater regulatory risk and potential impact of policy uncertainty on growth.
Idea Cellular fell 0.06 per cent and Reliance Communications 0.45 per cent.
Consumer goods maker Hindustan Unilever fell 0.56 per cent while cigarette maker ITC rose 0.17 per cent after falling as much as 1 per cent earlier.
The main BSE index fell 34.08 points to end at 15,814.72, with 16 of its components ending in the red.
Top private lender ICICI Bank snapped early losses and gained 0.35 per cent after Macquarie upgraded the stock to outperform from neutral on expectations of improvement in margins and better-than-expected asset quality.
Smaller rival HDFC Bank rose 1.05 per cent.
Trucks and cars maker Tata Motors fell 1.3 per cent to 200.60 rupees after Deutsche Bank downgraded the stock to sell from buy, citing weak demand and rising competition that could squeeze margins in the domestic market.
Mahindra & Mahindra, the country's largest utility vehicles maker, fell 0.11 per cent.
Motorcycle makers Hero MotoCorp and Bajaj Auto also fell 0.1 and 1.8 per cent respectively.
"Whenever foreign institutional investors (FIIs) are showing interest in the market, it prompts buying at lower levels and selling at higher levels," said Deven Choksey, chief executive at brokerage KR Choksey.
The index had briefly entered the positive territory on Monday after hitting the day's low.
Prime Minister Manmohan Singh Sunday said the Indian economy would likely withstand an uncertain external environment to grow about 7 per cent this fiscal year, lower than the government's revised forecast of about 7.5 per cent last month.
"The investor sentiment was negative right from start. But despite of prime minister's comments, the market has not fallen in a big way," said RK Gupta, managing director at Taurus Mutual Fund.
"There could be some positive trend in the market if we see good numbers from industrial production and Infosys earnings awaited later this week."
Infosys, the country's second largest software exporter, will kick off the October-December earnings Thursday.
Shares of Energy major Reliance Industries led Monday's losses with a 1.2-per cent fall, followed by top telecoms company Bharti Airtel that declined 3.16 per cent.
Royal Bank of Scotland has downgraded Bharti and Idea Cellular to hold from buy, and Reliance Communications to sell from hold, citing greater regulatory risk and potential impact of policy uncertainty on growth.
Idea Cellular fell 0.06 per cent and Reliance Communications 0.45 per cent.
Consumer goods maker Hindustan Unilever fell 0.56 per cent while cigarette maker ITC rose 0.17 per cent after falling as much as 1 per cent earlier.
The main BSE index fell 34.08 points to end at 15,814.72, with 16 of its components ending in the red.
Top private lender ICICI Bank snapped early losses and gained 0.35 per cent after Macquarie upgraded the stock to outperform from neutral on expectations of improvement in margins and better-than-expected asset quality.
Smaller rival HDFC Bank rose 1.05 per cent.
Trucks and cars maker Tata Motors fell 1.3 per cent to 200.60 rupees after Deutsche Bank downgraded the stock to sell from buy, citing weak demand and rising competition that could squeeze margins in the domestic market.
Mahindra & Mahindra, the country's largest utility vehicles maker, fell 0.11 per cent.
Motorcycle makers Hero MotoCorp and Bajaj Auto also fell 0.1 and 1.8 per cent respectively.
"Whenever foreign institutional investors (FIIs) are showing interest in the market, it prompts buying at lower levels and selling at higher levels," said Deven Choksey, chief executive at brokerage KR Choksey.
The index had briefly entered the positive territory on Monday after hitting the day's low.