BackMarkets shed 1%; Grasim slides on spin off plan
Markets shed 1%; Grasim slides on spin off plan
PremiumMumbai: Indian shares shed more than 1% on Monday as investors paused for breath after climbing to their highest close in 16 months last week, with weak US jobs data denting sentiment across Asia.
Shares in diversified Grasim Industries slid nearly 8%, before paring losses after it decided on the weekend to spin off its cement business and said it planned to consolidate the group’s cement business within 8 to 10 months.
Heavyweights energy major Reliance Industries, State Bank of India and Bharti Airtel also trailed as investor sentiment turned cautious ahead of quarterly results due from later this week.
“Today is a case of global weakness. At the same time, people are turning cautious as far as results are concerned, since we have already seen two quarters of good growth," said Ambareesh Baliga, vice president at Karvy Stock Broking.
“Quarter-on-quarter, we could fall short on expectations."
By 11:23am, the 30-share BSE index was down 0.98% at 16,967.36 points, with 24 stocks declining. The benchmark has more than doubled from a 2009 low in early March and is up 76% this year, boosted by foreign portfolio inflows of more than $12 billion in that period. The 50-share NSE index was down 0.89% at 5,037.95.
“It will be healthy if the market corrects by a 1,000 points over the next couple of weeks," said S.P. Tulsian, an independent investment analyst.
Grasim was down 5.7% at Rs2,546 after falling as low as Rs2,492. Analysts said the Aditya Birla group’s consolidation of its cement business was expected, but they were disappointed by the lengthy process it was likely to involve.
“They could have directly merged one into the other, it would have taken 3-4 months then. Instead, it will now take at least a year," said Tulsian.
Shares in UltraTech, a unit of Grasim whose board is scheduled to meet on Tuesday to consider the consolidation proposal, was down 1.3% at Rs838 after initially rising.
Among other major stocks, Reliance Industries, which has most weight in the main index, fell 1.6% to Rs2,135.50.
Largest lender State Bank of India shed 1.8% to Rs2,169, while ICICI Bank lost 1.2% to Rs913.20.
Diversified ITC Ltd bucked the trend, rising 1.5% to Rs236, while outsourcers Tata Consultancy Services and Wipro added about 0.8% each.
In the broader market, losers led gainers 1,351 to 917 on relatively light volume of 123.7 million shares.
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