Shares seesaw after 6-day rally; ONGC up

Shares seesaw after 6-day rally; ONGC up

Mumbai: Shares were down 0.1% in choppy trade on Friday, led by losses in Reliance Industries and Bharti Airtel, as investors booked profit after more than 7% rise in the past six sessions.

State-run Oil and Natural Gas Corp rallied as much as 6% in opening deals, bolstered by hopes for a reduction in the explorer’s royalty burden for a gas field in Rajasthan.

The cabinet on Thursday granted Vedanta Resources conditional approval to buy a stake in Cairn Energy’s Indian business, and one of the riders include sharing of royalty payments between ONGC and Cairn India.

At 11:58 am, the 30-share BSE index was down 0.1% at 18,832.63 points, after having risen nearly 1% in early trade, but 17 of its components were in the positive zone.

The market had risen early on drop in the crude oil prices and fading fears of a default by Greece but worries about the strength of the rally triggered profit booking, said Neeraj Dewan, a director with Quantum Securities in New Delhi.

“I don’t expect a sharp fall from these levels if there’s no shocker on monsoon and corporate earnings fronts," he said.

Monsoon rains, key to India’s trillion-dollar economy, were 10% above normal in the past week to 29 June, slowing from 23% above average the previous week, the weather office said on Thursday.

Oil prices fell on Friday after data from China showed factory output grew at its slowest pace in 28 months.

The BSE index is down more than 8% in 2011, making it one of the worst performing major markets in the world.

In the June quarter, the index fell 3.1%, its second straight quarterly decline after rising for the previous eight, as spiralling inflation and a slowdown in economic growth dispelled investors.

Shares in index heavyweight Reliance Industries dropped 1.9% to Rs881.60. The stock had risen more than 3% over the last two consecutive sessions.

Top mobile operator Bharti fell as much as 2.7%. Brokerage CLSA on Friday downgraded the stock to “underperform" from “outperform" saying it did not see any upside to its near-term earnings estimates.

Leading car maker Maruti Suzuki fell as much as 2.6% to Rs1,130 after it posted an 8.8% drop in June sales to 80,298 vehicles -- its first fall since December 2008.

Infosys Technologies, India’s No. 2 software services exporter, rose 1.5% to Rs2,954.15 as encouraging data from the US boosted outsourcing demand prospects.

Data on Thursday showed factory activity in the US Midwest accelerated in June. The world’s largest economy accounts for more than half of the earnings of India’s $60 billion outsourcing sector.

Stocks on the move

• Reliance Broadcast Network was up 1.7% at Rs81.60 after the firm said it had completed its final negotiations with group firm Reliance BIG Entertainment for acquiring its division Big Production.

• Cox & Kings rose more than 4% after the Business Standard newspaper reported that the company is planning to raise Rs1,500 crore from foreign institutional investors and has sought government approval.