Bangalore: Shares notched up their first weekly gain in four, despite closing a choppy Friday session 0.1% lower as investors booked profits following a four-day rally, supported by an upbeat domestic economic outlook.
The benchmark index rose 4.3% this week after being battered by a series of scandals, including issuance of telecom licenses at low prices and a bribes-for-loans scam that hurt the banking, real estate and telecom sectors the most.
Earlier, a local court ordered all eight executives arrested in the bribes-for-loans investigation into judicial custody until 16 December, before it began hearing applications for bail.
“The international markets and extension of the bail is weighing on the minds of the investors,” said Ambareesh Baliga, vice president of Karvy Stock Broking.
Real estate stocks led the decline on the day with top-listed realtor DLF dropping 4.5% and Jaiprakash Associates slipping 4.3%, dragging the sector index 4.3% lower. Banking stocks, which had bounced back on expectations of higher loan demand in the fast expanding economy, also came off.
Leading lenders State Bank of India and ICICI Bank ended down 0.9% and 0.7% respectively, while the banking index shed 0.9%.
The 30-share BSE index closed down 25.77 points at 19,966.93, with 17 of its components losing ground. The index had risen as much as 0.4% earlier. The broader 50-share NSE index was down 0.3% at 5,992.80 points.
“Sustaining these levels is going to be difficult considering the holiday season is approaching and the foreign institutional investors could take a break, go into hibernation.”
The benchmark index is up 14.3% so far this year, bolstered by overseas portfolio investments worth $29.1 billion. A series of positive economic data in the past few days have lifted investor sentiment about the country’s growth prospects.
A survey showed on Friday business activity in India’s services sector surged to a four-month high in November, driven by robust growth in new orders.
India’s manufacturing sector expanded at its fastest pace in six months in November, on a surge in new business and a sharp rise in export orders, another survey released this week showed.
Official data on Tuesday showed India’s $1.3-trillion economy expanded at a faster-than-expected 8.9% annual pace in the September quarter. The services sector, which accounts for more than 50% of GDP, grew 9.8%.
Outsourcers bucked the trend as economic data from the United States, their biggest market, pointed to an improving economy with better labour market data, a sharp jump in pending home sales and a stronger-than-expected November same-store sales.
Top-ranked Tata Consultancy Services rose 0.3%, while rivals Infosys Technologies added 0.9% and Wipro climbed 0.7%.
State-run Oil and Natural Gas Corp ended 0.5% higher at Rs 1,320.10 after a government source said the explorer will soon sign a deal for a 25% stake in Kazakhstan’s Satpayev exploration block.
Religare Enterprises rose as much as 4.3% early after it struck a deal to buy a majority stake in US-based Landmark Partners for up to $171.5 million. The shares gave up gains to close 2.7% lower at Rs 489.05.
In the broader market, losers led gainers in the ratio of 3.4:1 on volume of about 389 million shares.
Elsewhere, the pan-European FTSEurofirst 300 rose 0.3% at 4:05pm, while the MSCI’s measure of Asian markets other than Japan added 0.5%.
The ban on four firms - Ackruti City Ltd, Murli Industries Ltd, Welspun Corp Ltd and Brushman (India) Ltd and their promoters from trading in the stock exchanges led to a sharp fall in their stock prices on Friday.
The decision by capital market regulator Securities and Exchanges Board of India (Sebi) came after allegations of trading malparactices by these entities.
Both Ackruti City and Murli Industries saw their share prices fall 20% to hit their respective lower circuit limits. Welspun Corp’s stock price fell nearly 27% to Rs 160.30 after news of the Sebi order issued last night came in. Brushman (India) Ltd saw its stock price fall 5% to Rs 6.32.
Mahanagar Telephone Nigam Ltd rose as much as 4.7% early on news the state-run telecom firm had received tax refund worth Rs 300 crore for fiscal years 2001/02 and 2002/03. The stock, however, gave up gains to close 1.6% lower at Rs 53.80.