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Markets snap 7-day rally to end 0.3% down

Markets snap 7-day rally to end 0.3% down
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First Published: Fri, Jun 18 2010. 04 25 PM IST
Updated: Fri, Jun 18 2010. 04 25 PM IST
Mumbai: Indian shares snapped a 7-session winning run and shed 0.3% on Friday dragged down by fall in index heavyweight Reliance Industries as its short-on-specifics annual shareholders meet failed to meet huge investor expectations.
The Mukesh Ambani-led energy conglomerate, unfettered by a pact that banned it from competing with his younger brother Anil’s firms, announced an aggressive push into the power sector during a hotly anticipated shareholders meeting.
Investors were disappointed, however, that Mukesh Ambani, the world’s fourth-richest man, did not unveil more specific plans, and that Anil Ambani was not in attendance.
“There were a lot of unrealistic expectations built around the Reliance AGM (annual general meeting). People had expected a Bollywood kind of reunion between the two brothers at the meeting,” said Arun Kejriwal, director of research firm KRIS.
“The hype created obviously led to a disappointment and dragged the stocks of companies controlled by the (Ambani) brothers lower.”
The 30-share BSE index closed 0.26% or 45.87 points lower to finish at 17,570.82, after hitting 17,721.99 points, its highest since April 27. The 50-share NSE index dropped 0.2% to close at 5,262.60 points.
Seventeen of its components lost ground.
World stocks gained for the ninth straight day, as worst fears about the euro zone’s fiscal woes eased and risk appetite was seen returning.
A report from EPFR Global showed investors set aside sovereign debt fears and shifted their money to higher-returning assets in mid-June, with emerging market assets and US equities among the recipients of fresh cash.
Foreign funds, that had dumped $2 billion of Indian stocks last month, have bought around $773 million of India equities so far in June, pushing the benchmark index 3.7% higher.
Anil Ambani-led Reliance Natural Resources and Reliance Power shed 7.5% and 3.6% respectively.
Reliance Communications, also led by the younger Ambani, shed 3.6% after Reliance Industries did not make any indication about any potential deals with the country’s second-largest mobile phone operator.
The Times of India newspaper had reported the telecoms firm was in advanced talks to sell fibre optic cables and telecoms tower business to Reliance Industries.
Reliance Natural Resources, Reliance Power and Reliance Communications were the main most-traded stocks on the BSE.
Non-ferrous metals producer Sterlite Industries fell 2.3%, as Shanghai copper fell more than 1%, following a 3.1% tumble in London prices.
Other metal makers Hindalco and Tata Steel dropped 0.7% and 1.6% respectively.
Engineering major Larsen & Toubro aced gainers and climbed 1.3%, extending Thursday’s gains after provisional data showed its June quarter tax payment rose 18% from a year earlier, indicating stronger profits.
The company said on Friday it had received orders worth 14.4 billion rupees ($312 million) for building residential towers and factories.
Export-focused software majors rose on hopes a global recovery will boost outsourcing orders. Tata Consultancy Services rose 0.9% and Infosys climbed 0.5%.
In the broader market, declining shares outnumbered advancing ones in the ratio of 1.7:1, on volume of 347 million shares.
In the broader market, declining shares outnumbered advancing ones in the ratio of 1.7:1, on volume of 347 million shares.
STOCKS
Sun Pharmaceutical closed 0.5% higher at Rs1,710.25, after the drugmaker said it got USFDA approval for generic Xanax, Alprazolam tablets.
Cigarette-to-hotel business ITC closed 0.1% higher at Rs294.20 after its board approved a 1:1 bonus share issue.
Cairn India, an unit of UK’s Cairn Energy, dropped 0.4% to Rs305.55 as crude oil prices eased.
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First Published: Fri, Jun 18 2010. 04 25 PM IST
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