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Markets ease; banks, autos drop

Markets ease; banks, autos drop
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First Published: Mon, Feb 21 2011. 10 18 AM IST
Updated: Mon, Feb 21 2011. 10 18 AM IST
Mumbai: Shares eased on Monday in choppy trade as investors awaited a budget session of parliament, which could provide clues on the near-term outlook.
Financial issues and autos fell on worries hardening interest rates could squeeze demand.
Concerns over hardening interest rates, as inflation stays above the comfort zone, weighed on rate sensitive sectors.
President Pratibha Patil is scheduled to open the parliament session at around 11:00am, which could see the end of months of policymaking deadlock between the government and the opposition in a row over corruption scandals.
On Sunday, the government bowed to opposition demands for a parliamentary investigation into a major telecoms corruption scandal.
The annual budget would be presented to parliament on 28 February.
“The market should remain fairly choppy with a downward bias. There is nervousness politically as more issues creep up in the telecoms scam,” said Arun Kejriwal, director of research firm KRIS.
By 9:57am, the 30-share BSE Index was trading down 0.07% at 18,198.95, with 16 of its components declining. It had started higher. The 50-share NSE index was down 0.2% at 5,449.50.
In the broader market, losers were 1.3 times the number of gainers on volume of 35 million shares.
Leading lenders State Bank of India, ICICI Bank and HDFC Bank dropped between 0.2% and 1.2%.
Automakers Tata Motors, Maruti Suzuki, Hero Honda and Mahindra and Mahindra slipped between 0.9% and 2.4%.
Reliance Communications, the country’s No.2 cellular carrier, rose 1.6% after tumbling 6.8% on Friday.
The BSE index is down 11.3% year-to-date, with foreign funds selling more than $1.5 billion in the period.
Optimism on the economic outlook in the developed world has prompted foreign investors to select them as preferred investment bets over emerging markets such as India.
Investors pushed further into developed market equities in the week ended 16 February, focusing on the brightening prospects for economic growth and robust corporate earnings, data trader EPFR Global said on Friday.
The MSCI’s measure of Asian markets other than Japan was down 0.5% and Japan’s Nikkei were trading barely changed.
STOCKS
State-run oil marketing companies Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp were down 0.5-2% due to firm world oil prices.
Nestle India rose more than 3% to 3,572 rupees after the dairy products maker said late on Friday its October-December net profit surged 80%.
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First Published: Mon, Feb 21 2011. 10 18 AM IST
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