Mumbai: Shares dropped 0.2% on Thursday, facing resistance after their straight four-session rise, with shares in billionaire Anil Ambani-led companies trading in the red.
Reliance Communications fell as much as 2.8% after Anil Ambani, who controls the No. 2 mobile carrier, was questioned on Wednesday by federal police in a widening corruption probe that has battered the government.
JPMorgan slashed its target price on Reliance Communications on Wednesday by 49% to 82 rupees, citing lower estimates for wireless and broadband segments and issues related to spectrum regulations.
By 10:48am, the 30-share BSE index was trading down 0.1% at 18,291.25 points, with two-thirds of its components declining. It had gained 4.8% in the past four sessions.
But, the main index is down nearly 11% so far this year, as local corruption and inflation woes discouraged foreign funds, which have pulled out $1.7 billion.
“I think the market will consolidate around this level,” said K.K. Mital, head of portfolio management services at Globe Capital, adding he sees Nifty to trade in a range of 5,300-5,500 until the month end.
“It has been searching for positive cues and drivers to gain momentum, but they are not around for now. A rally is ruled out for now.”
Other Reliance ADA Group firms -- Reliance Infrastructure and Reliance Power were down 1.1% each. Reliance Communications was trading 0.8% lower.
“Lot of negative news are surrounding the Reliance Group. The group needs good luck. But, unfortunately it does not seem to be coming its way,” said Mital.
“We may see brokerage downgrades for Reliance Communications. But, it is a challenging time for him (Anil Ambani). How he comes out of this situation, depends on his skill and vision.”
Mahindra Satyam, which was earlier known as Satyam Computer Services, jumped 4.1% after the software services firm agreed to pay $125 million to settle US shareholder litigation arising from an accounting fraud that in 2009 turned into India’s biggest corporate scandal.
Even as market was choppy, the market breadth was positive with gainers outnumbering losers in a ratio of 1.5:1, with 83 million shares changing hands on the BSE.
The 50-share NSE index was barely changed at 5,482.35 points.
Oberoi Realty was up 1.9% to Rs 238.70, after Goldman Sachs initiated coverage on the real estate developer with a “buy” rating.
DQ Entertainment jumped 5.9% to Rs 78.65, after the animation content provider said it has signed a licensing agreement with Germany’s TV Mania through its merchandising agents in France.