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Markets drop 1.1%; banks fall, techs rise

Markets drop 1.1%; banks fall, techs rise
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First Published: Fri, Jan 07 2011. 10 57 AM IST
Updated: Fri, Jan 07 2011. 10 57 AM IST
Mumbai: shares were trading 1.1% lower on Friday, weighed down by concerns of interest rates increases to rein in accelerating inflation and little direction from mixed Asian markets.
The main BSE index, which had gained 17.4% in 2010, was on course to post a fall for the first week of 2011. Financials led the losers.
However, export-led outsourcers Tata Consultancy Services and Infosys Technologies rose to new highs on on hopes for better outlook in 2011.
By 11:24am, the 30-share BSE index was trading down 1.08% at 19,965.96, taking losses in the week to more than 2%. The 50-share NSE index was down 1.1% at 5,982.85.
Twenty-two of its components declined.
“People are waiting to see the results before more action,” said Vaibhav Sanghavi, director of Ambit Capital, referring to quarterly earnings that begin rolling out from next week.
“Meanwhile, inflation has been bothering and we can see banks under pressure.”
State Bank of India, the country’s largest lender, was down 1.6%, while HDFC Bank dropped 1.9%. Mortgage lender Housing Development Finance Corp shed 0.2%.
The banking sector index was down 0.7%.
Worries about aggressive rate increases by the central bank heightened after the food price index rose 18.32% in the 12 months to 25 December, its highest in more than a year.
Tata Consultancy, Infosys and Wipro, all of which get most of their revenue from overseas, were trading between 0.1% to 0.5% higher.
“The IT space looks buoyant. There is traction in hiring. We may see discretionary IT spending improving as well,” Sanghavi said.
Reliance Communications rose as much as 1.1% after BNP Paribas raised its rating on the No. 2 Indian mobile phone operator to buy from reduce, saying the valuation was below the replacement cost of assets.
Cigarette-to-hotel conglomerate ITC was up 0.5%, riding on a strong domestic consumption story. The stock had gained 39% in 2010.
In the broader market, gainers outnumbered losers in a ratio of 1.8:1 on volume of 113 million shares.
The MSCI’s measure of Asian markets other than Japan was down 0.5%, while Japan’s Nikkei was trading barely changed.
STOCKS
Nagarjuna Fertilizers and Chemicals rose 2.9% to Rs 32 after company said its board would meet on 10 January to consider restructuring and amalgamation of IKisan Ltd, Kakinada Fertilizers Ltd, Nagarjuna Fertilizers and Nagarjuna Oil Refinery Ltd.
State-run oil refiners Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp rose between 0.1% and 0.2% on lower world crude oil prices.
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First Published: Fri, Jan 07 2011. 10 57 AM IST
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