Mumbai: The main stock index ended flat on Friday, as state-controlled oil companies fell on fears this week’s petrol price hike would be partially rolled back, casting doubts about a potential increase in other fuels such as diesel.
The benchmark BSE index rose 0.4% for the week, snapping four consecutive weeks of losses, as investors saw the recent sharp sell-down as overdone, but the outlook remains deeply cautious.
Indian shares are still down 6.4% so far in May, as the Greek and the euro zone woes and fears about policy paralysis and fiscal challenges at home have hit markets and sent the rupee to a string of record lows against the dollar.
Foreign investors were net sellers of Rs 387 crore so far this month.
“Rupee has been an annoying factor for the foreign investors. Until it stabilizes, people will not commit any money,” said Jigar Shah, senior vice president at Kim Eng Securities
“The outcome of Greece is also uncertain as of now. Overall, there are far more irritants for the markets investors,” he added, “even though the markets are not expensive and oversold,”.
Markets ended flat on Friday despite a slight rebound in the rupee. Mint’s Lisa Pallavi Barbora gives you the day’s biggest gainers and the stocks that didn’t fare too well
The main 30-share BSE index ended flat at 16,217.82 points, while the broader 50-share NSE index also ended flat at 4,920.40 points.
Few analysts see any short-term catalysts for Indian markets unless global risk aversion wanes in the euro zone or the government announces major fiscal consolidation measures, both of which are seen as unlikely in the short-term.
Analysts at Goldman Sachs and Bank of America-Merrill Lynch cut their fiscal 2012-13 growth forecasts for India on Friday, with Goldman citing policy inaction as one of its key reasons.
Investors had initially cheered the government’s announcement on Wednesday to allow state oil companies to raise petrol prices, seeing it as a small gesture towards fiscal consolidation.
However, that optimism dissipated after the government appeared to backtrack amid intense political pressure, leading to expectations the petrol price hike would be rolled back.
Oil stocks Hindustan Petroleum Corporation fell 2.1%, while Indian Oil Corporation fell 1.6%.
Among other decliners ITC fell 0.6% as some investors thought Jan-March profits adjusted for other income came in slightly below their estimates, despite net profit beating expectations.
Auto stocks extended recent falls with Maruti Suzuki India and Mahindra & Mahindra ending down 2.2% each as analysts expect sales to be hit after the steep petrol price hike.
However, among gainers, steel companies rose on speculation the government would meet with them on June 1 to discuss an increase in long steel products.
Shares in Tata Steel rose 2.5%, while JSW Steel gained 2%.
Telecom stocks rose after a government commission said it wants more spectrum to be auctioned, which could help some companies increase their market share.
Bharti Airtel rose 0.4%, extending Thursday’s 5.6% gain after it signed a pact to buy a 49% stake in Qualcomm Inc’s fourth-generation (4G) Indian broadband venture.
Voltas, an air conditioning and engineering services provider, surged 12% a day after the company said it swung to a 1.04 billion net profit in the latest quarter from a 1.15 billion loss a year ago.