Mumbai: Markets were trading 0.4% lower in choppy trade on Friday, on course for a third consecutive week of losses, as investors awaited factory output growth that is expected to show a sharp slowdown.
Industrial output growth for December probably slumped to 2% in December from a year earlier, a Reuters poll showed. The data is due around 11:00am.
Shares in Anil Ambani-led companies fell sharply for the second time this week. Reliance Communications dropped 5.7%, Reliance Power slipped 3.5% and Reliance Infrastructure was down 2.4%.
On Wednesday, Anil Ambani’s Reliance ADA Group had blamed a sharp drop in its stocks on what it said was a series of “baseless and motivated rumors” spread by rivals, and said it had complained to the market regulator.
Cairn India rallied more than 5% after its December quarter net profit soared seven times from a year ago, and the oil explorer said uncertainty over a deal with Vedanta deal was ending.
Tata Motors, India’s leading truck maker that also produces cars, was up 1.7% ahead of its earnings. Analysts expect December quarter profits to jump 236%.
Telecom companies were under pressure after India’s telecoms regulator proposed steep rises in the price of 2G mobile radio waves earlier this week.
Bharti Airtel and Idea Cellular were down between 0.9% and 3.3%.
By 10:45am, the 30-share BSE index was trading down 0.42% at 17,388.20, with 20 of its components declining. The benchmark is down more than 3% so far this week, and has lost more than 15% since the start of January. The 50-share NSE index was down 0.4% at 5,204.35.
Lower Asian markets, high inflation and political corruption woes are expected to weigh down the near-term outlook for stocks, analysts said.
“It is the fear sentiment that is gripping the market. Even if we have good news coming in, we may not be able to hold on to the gains,” said Deven Choksey, managing director and CEO of KR Choksey Shares.
A spate of corruption scandals has crippled the government, led to arrests of politicians and company executives, and rattled a market worried about where the next shoe may drop.
The country’s Supreme Court asked the attorney general to consult and make a statement on the possibility of constituting a special court for 2G telecoms licence trial.
Financials pulled back after falling for most of the week. The banking sector index rose 0.4%, but is down close to 5% this month.
Leading lenders State Bank of India and ICICI Bank gained 0.4% and 1.1% respectively.
Cairn was trading up 4.1% at Rs 327. Cairn Energy agreed in August to sell up to 51% in Cairn India to Vedanta in a $10 billion deal, but the transaction has been delayed on issues around royalty payments. BNP Paribas raised Cairn India to “buy” from “hold” and raised its target price to 347 rupees from 331 rupees earlier.
In the broader market, gainers led losers in a ratio of 1.2:1 on volume of 83 million shares.
Asian stocks were set to post their biggest weekly loss in nine months, as investors shunned risk on concerns about the pace of policy tightening within the region and escalating tensions in Egypt.
Edserve Softsystems rose 5.5% to 121 rupees after the vocational training, school education and online education services provider said its December quarter net more than doubled.
Essar Shipping Ports & Logistics rose 4.8% to Rs 82.50 after the company said it signed a pact with the Port of Antwerp International for strategic collaboration.