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Markets drop 0.5%; Reliance falls, SBI up

Markets drop 0.5%; Reliance falls, SBI up
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First Published: Mon, Oct 17 2011. 12 58 PM IST
Updated: Mon, Oct 17 2011. 12 58 PM IST
New Delhi: Shares erased early gains and fell 0.5% on Monday, weighed down by energy major Reliance Industries and engineering conglomerate Larsen & Toubro .
Investor discomfort with quarterly earnings cast a shadow on the market, which had climbed to its highest close in the previous session, traders said.
Financial stocks such as State Bank of India and automakers Tata Mtoros and Maruti Suzuki bucked the trend and climbed.
By 11:31am, the main 30-share BSE index was down 0.47 % at 17,002.40, with 18 of its components declining. The index had opened 0.6 % up.
“We are seeing a tug-of-war between those who are convinced that the worst may be over for the economy in terms of inflation and interest rates and others still looking for clues,” said D. D. Sharma, vice-president at brokerage Anand Rathi.
Reliance Industries, which reported on Saturday a 15.8 % rise in quarterly profit, fell as much as 3.8 % to Rs 833.70 as investors worried about its core operation given that its other income boosted the profit.
CLSA lowered its rating on Reliance to “outperform” from “buy” and cut target price to 950 rupees from 960, citing premium to global peers and weak gross refining margins.
The company, India’s most valuable firm and the heaviest stock in the main index, had risen 2.4 % on Friday to its highest close in about 2-1/2 months.
Reliance will suspend oil and gas drilling pending an internal valuation of its exploration and production strategy, the Mint newspaper reported on Monday citing sources briefed by the company.
Larsen & Toubro, which reports earnings on Friday, was down 1.6 %.
Top software services firm Tata Consultancy services , which gets most of its revenue from exports, was down 0.8 % ahead of its quarterly results. TCS is expected to report a 16.5 % rise in profit for the September quarter.
Rivals Infosys and Wipro were down 0.6 and 0.3 % respectively.
Leading lender State Bank of India was up 1.7 %.
Tata Motors, the owner of Jaguar Land Rover, rose 3.4 % to 186.20 rupees after it said late on Friday its global sales rose 24 % in September.
Top car maker Maruti Suzuki rose 2.9 % after it resumed limited production at its Manesar plant shut down by labour unrest.
Shares in Coal India , the world’s largest coal miner, and power utility NTPC fell on constrained supply of coal.
Floods in eastern Orissa state, a strike at state-run Coal India, the key supplier, and political protests in the southern Andhra Pradesh state had hit coal supplies, leading to lower power generation last week.
The 50-share NSE index was down 0.59 % at 5,102.20. In the broader market, there were 721 gainers for 629 loser on total volume of 211 million shares.
Asian shares were up amid hopes that policymakers may finally come up with a plan this week to resolve the region’s debt woes and recapitalise its banks.
The MSCI’s broadest index of Asia Pacific shares outside Japan was up 1.62 %, while Japan’s Nikkei up 1.5 %.
STOCKS
NIIT rose as much as 20 % after the software trainer said it had sold its US unit’s entire stake in Element K Corp, a step-down subsidiary, to Ireland-based SkillSoft Ltd for $110 million.
Hindustan Construction Co fell as much as 5 % after the federal ministry of environment and forests declined to approve the first phase of a $31-billion-township being developed by the firm’s unit Lavasa Corp citing non-compliance with conditions specified by a ministerial panel.
Rain Commodities jumped as much as 16.4 % after the company said late on Friday its board would consider buyback of shares on 25 October.
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First Published: Mon, Oct 17 2011. 12 58 PM IST
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