Mumbai: The Bombay Stock Exchange’s (BSE) benchmark index fell on Thursday, snapping a two-day, 6.7% rally. Bharti Airtel Ltd and Reliance Communications Ltd (RCom) dropped after they had their price targets cut at Goldman Sachs Group Inc.
DLF Ltd declined after its share price forecast was reduced at Morgan Stanley, which said weak demand for property will damp profits. The company will report earnings on 31 January.
“We are seeing demand declining and revenue contracting,’’ said Mahesh Patil, who helps manage the equivalent of $8.8 billion (about Rs43,000 crore) at Birla Sun Life Asset Management Co. Ltd in Mumbai. “Cost pressures are high, now with demand declining it will create a problem.’’
Mahindra and Mahindra Ltd (M&M) led auto makers higher after the government cut retail fuel prices for the second time in less than two months.
The Sensex fell 21.19 points, or 0.2%, to 9,236.28. The S&P CNX Nifty index on the National Stock Exchange (NSE) fell 25.55 points, or 0.9%, to 2,823.95.
Bharti fell 3.8% to Rs627.40. RCom declined 2.6% to Rs161.85. The share prices are composite of BSE and NSE rates.
Bharti’s 12-month share price estimate was lowered 5.5% to Rs800 while that of RCom was lowered 25% to Rs170, according to a Goldman Sachs report released on Thursday. Goldman cited the effect on earnings from spending on high-speed networks.
DLF dropped 7.6% to Rs164.05 after its stock price estimate was cut by 41% to Rs150 a share at Morgan Stanley. The company is expected to report a 26% decline in earnings in the December quarter, according to the median estimate of analysts surveyed by Bloomberg.
M&M added 3.9% to Rs294.40. Tata Motors Ltd gained 3.7% to Rs152.05. Maruti Suzuki India Ltd added 4.6% to Rs544.45. Petrol prices will be lowered by Rs5 a litre, diesel by Rs2 a litre, and cooking gas by Rs25 a cylinder effective midnight, petroleum minister Murli Deora said late on Wednesday.
Asian Paints (India) Ltd dropped Rs30.80, or 4%, to Rs749.80, its lowest since April 2007, after the company reported that its founders pledged a 15% stake following tightened disclosure norms.
GAIL India Ltd slid Rs4.25, or 2.1%, to Rs197. The company said on Wednesday that third quarter profit declined 59% to Rs253 crore. That was below the Rs590 crore median estimate of a Bloomberg survey.