Mumbai: Shares were little changed on Thursday, after the earnings season failed to provide any cheer to investors buffeted by surging interest rates and slowing economic growth.
Concerns about the euro zone debt crisis and its impact on the global economy and the financial system also weighed on investor sentiment in Asia’s third-largest economy.
Markets at 12.06 pm on 17-11-2011
Shares in energy major Reliance Industries led the losses, falling 2.5% to Rs826.70, as institutional investors pared their holdings in the index heavyweight. The stock is down nearly a fifth this year.
The main 30-share BSE index was trading up 0.02% at 16,778.17 at 11:25 am, after having fallen as much as 0.7% earlier, with half of its components falling.
“The quarterly numbers of many frontline firms were poor as most of them are suffering due to higher borrowing and input costs, and slowing demand,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services.
“This quarter’s results are not likely to show any change in the trend due to the current interest rate regime and that’s a concern for the investors,” he said. “This and the global macroeconomic worries will keep the markets under pressure.”
The benchmark is down more than 18% in 2011.
The Reserve Bank of India has been among the most aggressive central banks globally, increasing rates 13 times since early 2010, which has dented consumer spending and investment by companies while inflation remains near double digits.
Markets at 12.10 pm on 17-11-2011
Weak global demand is exacerbating the slowdown in the Indian economy whose growth this year might be well below the 8.5% heady pace in the fiscal year that ended in March.
A weaker rupee failed to trigger support for export-driven software services firms such as Infosys and Wipro amid worries that a blowup of Europe’s problems could drag the United States back into recession.
Fitch Ratings warned that it may reduce its “stable” rating outlook for US banks with large capital markets businesses because of contagion from problems in troubled European markets.
Infosys fell nearly 1% to Rs2,751.05 and Wipro dropped 0.7% to Rs371.60. The technology sector index was trading 0.7% lower.
Top mobile operator Bharti Airtel climbed as much as 0.8% after a senior Bharti executive said on Wednesday the firm saw a rise in the uptake of third-generation (3G) services it launched earlier this year.
Software services company Patni Computer Systems rose as much as 11% to Rs432.40, the highest level in more than 10 months, after US-listed parent iGate said it planned to delist Patni.
The delisting, expected to be completed by mid-2012, will be done through a reverse book-building process, iGate said in a statement late on Wednesday.
The 50-share NSE index was trading down 0.03% at 5,028.70 points. In the broader market, losers were slightly ahead of gainers in the ratio of 1.4:1 on moderate volume of about 162 million shares.
Asian shares and the euro fell as doubts deepened about Europe’s ability to stop its sovereign debt crisis from spinning out of control, with the region’s biggest nations split over the European Central Bank’s bond buying role.
Stocks on the move
• BGR Energy Systems was trading 3.5% higher at Rs288 after the power equipment maker said it had bagged a contract worth Rs1698 crore.
• Cipla was up 2.6% at Rs318.45. The stock had risen nearly 8 percent in the previous two sessions after the company on Monday posted a better-than-expected 17.5% rise in the quarterly profit.