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Markets seesaw; Reliance drops; Mahindra up

Markets seesaw; Reliance drops; Mahindra up
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First Published: Wed, Jul 28 2010. 11 56 AM IST
Updated: Wed, Jul 28 2010. 11 57 AM IST
Mumbai: Indian shares were choppy on Wednesday as investors were wary about the outlook for earnings, with shaky Asian markets and subdued US consumer confidence also denting sentiment.
Energy major Reliance Industries initially rose after posting nearly a third rise in quarterly profit late on Tuesday, but then fell as brokerages lowered their rating on the stock.
By 11:32am, the 30-share BSE index was trading up 0.02% at 18,081.16, with 19 of its components gaining. The 50-share NSE index was up 0.02% at 5,431.95.
Top utility vehicle maker Mahindra & Mahindra was up 1.6% ahead of its quarterly earnings. A Reuters poll suggested the company may report a 25.2% rise in net profit.
Leading listed real estate firm DLF was trading down 0.3%, ahead of its results likely after market hours.
“Earnings are turning to be a mixed bag. Topline growth has been good, but input costs have been a concern for some companies,” said Vaibhav Sanghavi, director of Ambit Capital.
Reliance, which has the heaviest weight on the main index, was trading down 0.9% after rising as much as 1.4%. Brokerage Edelweiss cut Reliance to hold from buy, after the energy major said it would maintain gas production at 60 million standard cubic metres of gas a day for the next 9-12 months.
The downgrade was also due to lower-than-expected June quarter refining margins, the brokerage said.
Reliance, India’s largest listed company, posted a 32% rise in quarterly profit on higher gas production, with demand for refined products in fast-growing Asia and improving margins set to drive growth.
Financials were mixed after a new Reuters poll showed the central bank was likely to raise rates more aggressively in the rest of the fiscal year, after tightening policy more than expected on Tuesday.
Top lender State Bank of India was barely changed while rival ICICI Bank shed 1%. Private-sector lender HDFC Bank firmed 0.7% and mortgage lender Housing Development Finance Corp climbed 0.6%.
The BSE index is up 3.5% so far in 2010, supported by foreign buying of $9.1 billion of stocks. In the broader market, gainers led losers in a ratio of 1.4:1 on volume of 126 million shares.
STOCKS
Cairn India dropped 2.5% to Rs323 after the oil explorer’s quarterly net profit at 2.81 billion rupees was below market expectation of 4.98 billion.
HT Media Ltd rose 1.1% to 155.95 rupees after the publisher of newspapers, journals and periodicals posted a 44% jump in quarterly profit.
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First Published: Wed, Jul 28 2010. 11 56 AM IST