Markets down 0.4%; RCom rebounds

Markets down 0.4%; RCom rebounds

Mumbai: Shares were trading 0.4% lower on Tuesday after two days of gains, with trading choppy in the absence of clear direction from Asian markets.

Reliance Communications (RCom) fell as much as 2.3% after the second-biggest mobile carrier by customers reported a 57% drop in quarterly profit, its sixth straight quarterly fall, hit by lower call prices and costs from its heavy debt burden.

The stock later recouped and was trading up 1%, but is down more than 30% so far this year and analysts were downbeat on the outlook.

“The stock has crashed significantly, but we are revising down our FY12 earnings forecast 27% on back of disappointing metrics," Edelweiss said in a note and maintained its “reduce" rating.

Unitech slid as much as 5.7% after the second-biggest listed real estate company reported a 37% fall in quarterly profit after market hours on Monday, as high property prices and borrowing costs hurt demand.

By 10:29 am, the 30-share BSE index was trading down 0.38% at 18,132.50 points with two-thirds of its components declining. It had started higher.

“The market is consolidating after two days of gains. If European markets are steady to higher, we may see a rise in the latter half of the day," said Ambareesh Baliga, vice-president of Karvy Stock Boking.

The benchmark index has shed 11.6% so far in 2011, as foreigners sold a net of around $1.8 billion equities.

Engineering and construction conglomerate Larsen & Toubro shed 1.4% after rising 6.7% in the previous session.

Tata Steel, the world’s No. 7 steelmaker, was down 0.4% ahead of its December quarter results. Analysts expect quarterly net profit to have more than doubled.

Tata Power climbed 1.4% after the private-sector power utility said late on Monday its third-quarter profit rose 8% from year ago.

In the broader market, gainers and losers were nearly equal on volume of 94 million shares.

The 50-share NSE index was down 0.4% at 5,433.40.

The MSCI’s measure of Asian markets other than Japan was barely changed, while Japan’s Nikkei rose 0.2%.

Stocks on the move

Ispat Industries was down 2.6% at Rs232.55 after the steelmaker swung to a loss of Rs409 crore in the December quarter from a profit of Rs188.7 million a year ago.

Jaiprakash Power Ventures was up 3.7% at Rs42.20 after parent Jaiprakash Associates said late on Monday it is planning to raise Rs3,500 crore for its power unit through a follow-on share sale or issue of global depositary receipts.