Shares post biggest weekly fall in 11 weeks

Shares post biggest weekly fall in 11 weeks

Mumbai: Indian shares posted its biggest weekly fall in 11 weeks, but early gains on Friday triggered by strong global cues were checked by a 4% fall in energy giant Reliance Industries.

Reliance Industries declined as much as 4.5% after partner Hardy Oil and Gas said it will stop exploring a well for gas in the D9 block off India’s east coast.

The stock closed 4% lower at Rs2,047.30, its lowest close in almost seven weeks.

Hardy Oil said the well, in the Krishna Godavari basin, encountered poor reservoir sands, and will be plugged and abandoned. Reliance, which has a 90% interest in the block, declined to comment.

“It is an overreaction," said Amitabh Chakraborty, president of equities at Religare Capital. “It is very normal for an exploration & production company to take steps like these."

“Market is at an edge as valuations are stretched, and people are just looking at reasons to book gains. Any negative news is overplayed," he added.

“The impact of this news on Reliance Industries has been high, considering that it is already bothered by the court case," said R. K. Gupta, managing director of Taurus Mutual Fund.

The 30-share BSE Index closed 0.13% or 21.07 points higher at 16,810.81 with 18 of its components gaining. It rose to as much as 17,006.77 in early deals.

The index shed nearly 3% this week, but is up more than 74% so far in 2009, powered by foreign fund inflows of over $14 billion.

“We could see Reliance Industries lower on Monday too, which will hurt the market as well, as it has the highest weight on Sensex," added Gupta.

Banks bounced back after being battered in recent sessions, but closed off highs as a finance ministry official told Reuters the ministry was not pushing to raise the hold-to-maturity cap for banks.

The sector index closed 1.31% higher after shedding 4.6% in four previous sessions.

State Bank of India closed 1.2% higher at Rs2,353.85, while ICICI Bank rose 1.5% to Rs904.20.

Engineering and construction major Larsen & Toubro declined 2.3% to Rs1,571.35, its lowest close in seven weeks , as its September quarter sales lagged forecasts and it said funding delays were still slowing some projects.

“Execution and, hence, sales growth in the quarter were tepid due to a delay in clearances for infrastructure projects, and lower demand for machinery and industrial products," Goldman Sachs said in a note, while maintaining a “neutral" rating on Larsen & Toubro.

Cigarette maker ITC jumped nearly 5% to Rs259.85, as it reported a better-than-expected 26.3% rise in its September quarter net profit.

The country’s third-largest software services exporter Wipro climbed 2.1% to Rs589 after it said late on Thursday it won a 10-year technology outsourcing contract from the airport in national capital New Delhi.

In the broader market, gainers outnumbered losers in the ratio of 1.1:1, in a relatively lower volume of 371 million shares.

The 50-share NSE index closed 0.17 percent higher at 4,997.05.