Mumbai: Indian shares fell to a three-week low on Monday after disappointing quarterly earnings hit Bank of Baroda and IDFC Ltd, while investors continued to book profits in recent outperformers such as Oil and Natural Gas Corporation Ltd (ONGC).
Broader losses were capped as Tata Motors Ltd and UltraTech Cement Ltd rebounded from Friday’s steep falls when the two stocks were affected by a technology glitch at a domestic brokerage that resulted in “unintended transactions.”
Sentiment has been dented ever since the Reserve Bank of India (RBI) disappointed investors on 29 January with a more-cautious-than-expected stance on future rate cuts.
The BSE index, Sensex, has fallen 1.44% since then as of Monday’s close.
Analysts expect trading to remain rangebound in the lead-up to the presentation of the 2013/14 federal budget on 28 February. Finance minister P. Chidambaram has reiterated his commitment to controlling spending, especially at a time when India faces fiscal and current account deficits.
“There is a big gap between the previous trigger that is RBI rate cut and the next which is the budget, so there is some profit-booking in the interim,” said G Chokkalingam, executive director and chief investment officer, Centrum Wealth Management.
The Sensex fell 0.15%, or 30 points, to end at 19,751.19, marking its lowest close since 11 January. The broader NSE index, the Nifty, fell 0.19%, or 11.65 points, to end at 5,987.25, closing below the psychologically important 6,000 level.
Bank of Baroda shares slumped 7.50% after the lender said October-December net profit fell 21.6% from a year earlier to Rs.1,012 crore, while non-performing assets rose.
Shares of IDFC fell 5.36% after the lender and consultant for infrastructure projects registered weak loan growth in the December quarter and reported an in-line profit growth.
Jubilant Foodworks Ltd dropped 5.23% after reporting a smaller-than-expected 28% rise in quarterly net profit, with margins also falling short of market expectations.
Investors also booked profits in recent out-performers. Shares of ONGC fell 2.08%, down for a second consecutive session, after surging 26.8% in January.
State Bank of India fell 2.41%, posting its fifth losing session out of the past six.
However, Tata Motors gained 2.40% and UltraTech Cement ended up 1.70% after each briefly plunged as much as 10% on Friday.
Religare Capital Markets said on Saturday a technology glitch at the brokerage had caused “unintended transactions” in the shares of Tata Motors and UltraTech Cement.
Power Finance Corp. Ltd rose 3.47% and Rural Electrification Corp. Ltd shares gained 4.69% on speculation the government is preparing to offer new incentives to revive stalled power projects.
ICICI Bank Ltd added 0.94% after falling 3.4% in the previous two sessions. Reuters