Mumbai: Financial stocks dragged Indian shares lower on Thursday after hawkish comments by the central bank, but Bharti Airtel climbed as it inched closer to a $9 billion deal to buy most of Zain’s African assets.
By 10:12am, the 30-share BSE index was trading down 0.22% at 17,411.84 points, with 19 of its components dropping. The 50-share NSE index was down 0.2% at 5,212.50.
Bharti rose as much as 3.2% after the board of Kuwaiti telecom firm Zain approved selling most of its African assets to India’s top mobile operator. Bharti is expected to make an announcement as the deadline for exclusive talks ends on Thursday.
Zain said on Wednesday it would sign the deal in the next few days, confirming what sources with direct knowledge of the matter told Reuters earlier.
“It shows the growing aspirations of India entrepreneurs to establish their footprint globally,” said Rakesh Rawal, head of private wealth management at Anand Rathi from Bangalore. “Africa has huge untapped growth potential and it is a good move by Bharti from a long-term perspective. Although, in the near term the domestic issues like competition and price wars will weigh.”
Bharti pared some gains and was up 1.6% at Rs311.60.
Financials edged lower after the Reserve Bank of India governor said on Wednesday that demand-side pressure on the economy can build up further and it was better to take some action now and continue with the exit strategy.
The central bank had hiked key rates by 25 basis points last Friday, a month earlier than expected, and another increase is seen at its policy review on 20 April.
Leading lenders State Bank of India and ICICI Bank dropped 0.9% each while Housing Development Finance Corp shed 1.8%.
Traders said faltering global stocks that were weighed down by a credit downgrade of Portugal and worries over a spiralling debt burden in some developed economies also kept investors wary.
“The market will eye March quarter earnings from here on but the global uncertainties will continue to weigh,” said Vaibhav Sanghavi, director of Ambit Capital.
“It is a wait and watch situation. We need to see how things unfold globally,” he said.
Earlier this month, a Reuters poll showed the benchmark was expected to rise to 18,000 points by end of June and hit 19,250 by December.
In the broader market, gainers outnumbered losers in a ratio of 1.2:1 on a volume of 95 million shares.