Mumbai: Shares were subdued on Tuesday as economic concerns came to the fore and mounting political opposition to reforms such as opening up the supermarket sector to foreign giants unnerved investors.
Sensex at 11:55am
Uncertainties about problems in Europe also added to the negative mood, traders said.
Worries of India’s economic growth, which has lost momentum after 13 interest rate increases and high inflation dented consumer spending, could be worse than expected also weighed on the market.
Growth in the September is expected to have slowed to 6.9%, the weakest pace in more than two years, a Reuters poll showed. The data is scheduled for release on Wednesday.
“A lot of investors believe it would be below 6.5%,” said Kishor Ostwal, chairman and managing director of CNI Research. “So, nobody would like to go long.”
By 11:33am, the main 30-share index was down 0.32% at 16,117.50. Sixteen of its components declined.
The benchmark, which is one of the world’s worst performers this year, had rebounded 3% on Monday after the government liberalised the retail sector to large foreign chains.
However, the move triggered protests from within the ruling coalition and opposition parties and the government appeared to be backtracking.
Energy major Reliance Industries led the fall in the main index, shedding 1.5% after it began arbitration proceedings against the government to keep its entitlement to recover costs related to KG-D6 block, off India’s east coast.
Reliance said in a statement late on Monday it was concerned by media reports the oil ministry would seek to restrict the amount the company takes out towards cost recovery from its revenues from sale of gas produced from the D1 and D3 fields in the block.
Other big losers included information technology bellwether that fell 1.4%, while mobile operator Bharti Airtel dropped 1.8%.
Alex Mathews, head of research at Geojit BNP Paribas Financial Services, said investors were also cautious ahead of definite moves to tackle the euro zone debt problem.
Euro zone finance ministers will meet later on Tuesday with detailed operational rules for the region’s bailout fund, paving the way for a €440 billion facility to draw cash from investors.
The 50-share NSE index was down 0.2% at 4,841.75 points.
In the broader market, 689 gainers were slightly ahead of 647 losers on total volume of about 102.99 million shares.
The MSCI’s broadest index of Asia Pacific shares outside Japan rose 0.95% and Japan’s Nikkei was up 1.31%.
Bharat Petroleum Corp, Indian Oil Corp and Hindustan Petroleum Corp fell 0.5-2.7% after a source told Reuters the state-run refiners could cut retail prices of petrol by about 1.5% per litre.
Power equipment maker Siemens Ltd dropped 0.71% to Rs 701, after Deutsche Bank cut its target price to 680 rupees but maintained a ‘hold´ due to slowly improving business outlook.
Videocon Industries rose 2.7% after its partner in Mozambique oil and gas fields, Anadarko Petroleum Corp, raised recoverable gas reserves at Offshore Mozambique on Monday, four dealers said.
JSW Energy was down by 0.5% after the power utility said late Monday its chief executive officer and Joint Managing Director Lalit Kumar Gupta resigned.