Mumbai: Indian shares closed down 0.09% in see-saw trade on Tuesday, with financials and oil retailers among the losers, as conflicting market chatter about a possible local fuel price hike and continuing worries over rising interest rates spooked investors.
Shares of state-run oil marketing companies Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd fell between 0.19% and 0.5% after a ministerial panel meet to discuss raising fuel prices was deferred.
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The government was expected to raise diesel prices by over Rs 4 a litre at a cabinet level ministerial panel meet on Wednesday.
Leading private sector lenders, ICICI Bank Ltd and HDFC Bank Ltd fell 0.63% and 1.42%, respectively, on worries that a hike in lending rates would hurt business. The banking sector index slipped 0.61%.
The Reserve Bank of India has been among the most aggressive central banks globally, effecting nine rate rises since mid-March 2010.
India will maintain its anti-inflationary stance even if that means sacrificing growth in the short term, central bank governor D. Subbarao reiterated on Monday.
But a drop in oil prices helped sentiment in a market that is edgy about sticky inflation. “If inflation cools off for the next two-three weeks, then the markets will be stable depending on how crude behaves,” Neeraj Dewan, director at Quantum Securities Ltd said. ”My sense is, we have made the bottom.”
Oil prices fell as the strong Chinese data raised caution the country may extend efforts to cool down the economy and CME, the world’s largest commodities exchange, raised the margin call for crude futures for the fourth time since February.
The 30-share Bombay Stock Exchange (BSE) index closed 0.09% lower at 18,512.77 points, with 17 components advancing. The 50-share National Stock Exchange (NSE) index closed 0.18% lower at 5,541.25.
Hindustan Unilever Ltd rose more than 4% after the company’s better-than-expected earnings for the March quarter. Emkay Global Financial Services Ltd upgraded the stock to “accumulate” from “hold” and said the company was trading at attractive valuations unlike its peers, which were trading at a premium to historic averages.
Shares of non-ferrous metals producer Hindalco Industries Ltd rose as much as 2.4% to Rs 207.50, after it reported a higher-than-expected 7% rise in quarterly net profit after market hours on Monday.
In the broader market, 1,415 losers outnumbered 1,382 gainers on a volume of 307.9 million shares.
The MSCI world equity index was up 0.49% by 1057 GMT while the Thomson Reuters global stock index was 0.18% higher.
Aurobindo Pharma Ltd rose more than 7% after the company reported a robust revenue growth of 25% for the January-March quarter on Monday.
Essar Shipping Ports and Logistics Ltd rose 10% to Rs 97.90 after the company late on Monday fixed 19 May as the final date to spin off its ports and logistics business.
Mundra Port and Special Economic Zone Ltd rose 3.9% after the firm forecast a five-fold growth in its port handling capacity by 2013 and posted a 74% jump in its March quarter net profit, as revenue rose on higher cargo and container volumes.
Bharghavi Nagaraju contributed to this story.