Mumbai: Indian shares fell 0.9% on Monday, joining the sell-off in Asia on worries austerity measures in euro zone would hamper a recovery, but losses were capped by Larsen & Toubro’s forecast-beating quarterly earnings.
Shares in Larsen & Toubro closed nearly 5% higher at Rs1,605.55, after the top engineering and construction firm announced a 44-percent jump in March quarter net profit and said its large order book would boost growth in the medium term.
L&T shares soared as much as 5.6%, from a fall of 3.6% earlier in the day.
“L&T saved our day,” said Ambareesh Baliga, vice-president of Karvy Stock Broking, adding, even though domestic shares declined, it performed better than its regional peers.
The 30-share BSE index closed 0.9% or 159.04 points lower at 16,835.56 points, with 24 of its components closing in the green. It hit the day’s low of 16,551 points, its lowest level since 2 March.
Baliga expects the Sensex to shed around 1,000 points over a month due to euro zone worries.
“In the near term, money flow into our country may be hampered due to risk aversion by investors. But in the long term, the market follows the economy and so, the long-term outlook is bullish in a growing economy like ours,” Baliga said.
A late recovery in the European stocks and the arrival of monsoon also helped erase some of the day’s losses, dealers said.
Monsoon rains, vital for farm output in India’s trillion-dollar economy, have reached the Andaman and Nicobar islands, the first landmark in its four-month journey across the subcontinent, a senior weather official told Reuters.
The benchmark has dropped 4.1% so far this month, with foreign funds pulling out around $500 million from Indian equities. Still, they have invested a net of nearly $6 billion so far this year, after a record $17.5 billion last year.
Top-listed firm Reliance Industries, which has the highest weight on the Sensex, dropped 2.6% to Rs1,016.75.
Export-focused software companies edged lower on concerns that order flow from euro zone could be hit on mounting concerns on the economic health of the region.
Top outsourcer Tata Consultancy Services shed 2.5% while rivals Infosys and Wipro dropped 1.6% and 3.3% respectively. Top lender State Bank of India recovered some of the day’s losses and closed 1.3% higher.
The stock had shed 4% last Friday, when it posted an unexpected 32% drop in quarterly profit, hit by a jump in bad loan provisions.
Reliance Communications, controlled by billionaire Anil Ambani, dropped 2%. The No. 2 mobile phone operator said on Saturday March quarter profit fell an annual 16% as wafer-thin call tariffs squeezed margins, but higher net interest income cushioned the fall.
Top-listed real estate firm DLF declined nearly 4%. Its quarterly net profit surged due to improved demand for real estate, but its earnings came below some analysts’ expectations.
Metal makers Tata Steel and Sterlite Industries dropped 2.3% and 0.2% respectively, as base metal prices slumped with London copper falling to its weakest in two weeks.
Aluminium maker Hindalco, bucked the trend and closed 0.2% higher.
In the broader market, losers outnumbered gainers in a ratio of 1.7:1 while around 296 million shares changed hands on the BSE, lower than last Friday’s volume.
The 50-share NSE index closed 0.7% lower at 5,059.90 points.
Elsewhere, the MSCI’s measure of Asian markets other than Japan was down 3.3% by 1022 GMT, while the FTSEurofirst 300 index of top European shares climbed 0.8%.
World stocks as measured by the MSCI All-Country index were down 0.7% while the emerging markets index was down more than 2%.