New Delhi: India’s main stock index eked out modest gains in flip-flop trading on Monday, with a rebound in commodities markets and global crude oil prices renewing investor worries about the impact of rising interest rates and high inflation.
Top mobile carrier Bharti Airtel Ltd rose more than 4% and the largest household products and consumer goods maker Hindustan Unilever Ltd (HUL) added 3.2%, leading the gains in the main index.
But shares in Indian lender SKS Microfinance Ltd plummeted 18.2% on Monday after the company swung to a big quarterly loss and analysts forecast a gloomy outlook for the sector.
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Commodity prices firmed, bouncing back from their biggest weekly drop since 2008, while crude prices pushed above $112 per barrel after shaving off $16 last week—its biggest ever decline in dollar terms.
“People are watching commodity and crude prices,” said K.K. Mital, head of portfolio management at Globe Capital Market Ltd. “The concern is that crude prices may go up from this level and that would put some pressure.”
The 30-share Bombay Stock Exchange (BSE) benchmark index, Sensex, closed 0.05% higher at 18,528.96 points, but the gains were not broad-based as 18 of its components fell.
The index had rebounded on Friday after nine sessions of decline, but posted its biggest weekly loss in more than three-and-a-half months. The index is 9.7% down on the year.
The 50-share National Stock Exchange (NSE) index closed 0.01% lower at 5,551.10.
A ministerial panel is expected to meet on 11 May to decide on a fuel price increase. Diesel and cooking fuel prices are, unlike petrol prices, controlled by the Central government.
“Crude prices are the single biggest factor affecting the economy at the moment. A fuel price hike looks quite likely. And this in turn could force interest rates even higher,” said Neeraj Dewan, director at Quantum Securities Ltd.
Shares in Bharti Airtel added 4.1% to Rs 365.20 after losing 8.5% in the previous four sessions.
Bharti Airtel on Thursday reported its quarterly profit fell more than expected, mainly dragged by its loss-making African operations.
Hindustan Unilever gained 3.55% to Rs 284.45. Earlier, the company reported a 2% fall in quarterly profit, but beat forecasts.
Financial stocks fell on worries the increase in lending rates would make loans more expensive and hurt business, after ICICI Bank Ltd raised its lending rate by 50 basis points from Saturday, the first among the largest banks to do so.
Top lender State Bank of India lost 1%, while HDFC Bank Ltd fell 0.8%. ICICI Bank closed 0.1% lower.
Auto makers fell after data released by an industry body showed car sales in April grew at the slowest pace since June 2009, hit by rising interest rates and as high commodity prices pushed up car prices.
Leading car maker Maruti Suzuki (India) Ltd lost 2.2%, while Tata Motors Ltd fell 1.9%.
In the broader market, 826 losers outnumbered 583 gainers on volume of 460.6 million shares.
The MSCI world equity index was down 0.4% by 1048 GMT, while the Thomson Reuters global stock index edged 0.1% lower.
Shares in state-run fuel retailers Indian Oil Corp. Ltd, Hindustan Petroleum Corp. Ltd and Bharat Petroleum Corp. Ltd fell between 1.7% and 3.1% after crude prices rebounded. The companies are forced to sell diesel and cooking fuel at discounted state-set prices.
Piramal Healthcare Ltd fell 8.8% to Rs 418.50 as investors gave a thumbs down to its planned financial services foray.
Graphic by Paras Jain/Mint