Mumbai: Shares closed down 0.9% on Friday on caution ahead of the central bank’s policy review next week , with Larsen & Toubro among the big losers after the engineering and construction conglomerate cut its order growth outlook.
The main 30-share index ended down 151.25 points at 16,785.64 points, with only seven of its components advancing. It posted a loss of 1.7% for the week.
“With food inflation crossing 10% on Thursday, it was certain that the RBI (Reserve Bank of India) will hike raise when it comes out with the policy on 25 October,” Kishor Ostwal, chairman and managing director at CNI Research said.
Central bank is widely expected to deliver one final interest rate increase at its policy review next week and then pause until the end of the fiscal year in March, a Reuters poll found.
“L&T also spoiled the sentiment, even though the results were good, the company has cut its order growth guidance for the current fiscal year to 5%,” Ostwal said.
L&T shares fell as much as 4% before closing down 3.6%, their biggest single day loss in nearly a month. The firm, which posted a 4.3% rise in quarterly net profit, beating street estimates, slashed its order growth guidance for the current fiscal year on slowing investments and rising competition.
Shares in Maruti Suzuki rose 1.6% after the country’s largest carmaker said a labour unrest at its Manesar plant had been resolved and operations at the facility would start on Saturday.
Maruti, 54.2% owned by Japan’s Suzuki Motor Corp , has suffered a total production loss of over 64,000 cars in 2011 due to strikes by its employees, a shortfall equivalent to around $400 million.
Motorcycle makers Hero MotoCorp and Bajaj Auto rose 1.1% and 1.72%, respectively, on robust sales growth expected in the run to the festive season.
Cairn India closed down 2.08% at Rs 287.45 after brokerage Macquarie downgraded the oil explorer to “underperform” from “neutral,” citing expensive valuations and on expectations of a possible decline in crude oil prices.
Shares in DLF Ltd fell 2.47% after the capital markets regulator said on Thursday it would investigate allegations the top-listed realtor failed to disclose a police complaint against an associate firm in its share sale document in 2007.
The 50-share NSE index ended down 0.82% at 5,049.95 points.
In the broader market, there were 525 advances and 905 declines on a total volume of 461.6 million shares.
“ Rollovers are above average and are happening with long bias on Nifty, this augurs well for the market in the near term. Nifty can scale 5,200 in near term,” said Monal Desai, vice president, institutional derivatives, at brokerage firm Prabhudas Liladhar.
Monthly derivatives contracts will expire two days early on 25 October due to the Diwali holidays, which is expected to add to investor wariness.
Markets elsewhere in Asia were cautious after European leaders said they did not expect Sunday’s meeting to give an all-cure solution to the euro zone’s debt problems, with regional leaders still sharply divided over how to strengthen a rescue fund.
The MSCI’s broadest index of Asia Pacific shares outside Japan rose 0.34%, while Japan’s Nikkei was flat.
KPIT Cummins Infosystems rose 3.36% after its July-September net profit jumped 54%.
Indiabulls Real Estates fell 1.94% after its second quarter net profit grew 22%.
Punj Lloyd , which had projects worth 35 billion rupees in Libya as of February, fell nearly 1.01% on hopes that the insurgency in that country might end following the killing of Moammar Gadhafi on Thursday. .