Markets flip-flop on Greece’s downgrade

Markets flip-flop on Greece’s downgrade

Mumbai: Indian shares seesawed on Tuesday as Moody’s downgrade of Greece’s debt to junk status revived concerns about the woes in euro zone and halted a rebound in world markets.

Traders said investor sentiment was fragile and a fresh bout of risk aversion could dent foreign fund inflows that were slowly picking up after a selloff in May.

Reliance Communications bucked the trend rallied as much as 5.2% after the No. 2 Indian mobile operator’s board approved a proposal to bring investors into its telecoms tower arm.

On Tuesday, the Economic Times named American Tower, a consortium of private equity firm Blackstone and Crown Castle International, and India’s GTL among suitors for Reliance Comm’s tower unit.

By 11:19am, the 30-share BSE index was trading down 0.12% at 17,317.11, with half of its components declining.

Deven Choksey, managing director and CEO of KR Choksey Shares, he expected foreign institutional investors (FII) to continue investing in India but probably at a slower pace.

“FII flow will not come with a bang," he said. “It will definitely flow gradually. They would not want to miss out on India’s growth story."

Data last week showed India’s factory output grew an annual 17.6% in April, with manufacturing growth matching its fastest pace in at least 15 years. Foreign funds have bought shares worth nearly $358 million in June after dumping $2 billion last month.

Banks edged lower after rising in recent sessions. The sector index was down 0.5% after gaining 3.8% over four previous sessions.

Top lender State Bank of India was down 0.3% while rivals ICICI Bank and HDFC Bank shed 1.1% and 0.6% respectively.

Metals rose on short-covering and as they caught up with the recent underperformance compared with the broader market, dealers said.

The sector index was up 1.1% but still down nearly 16% since the start of May.

Non-ferrous metals producer Sterlite Industries and aluminium producer Hindalco rose 2.9% and 0.4% respectively.

Tata steel, the world’s eighth-largest steel maker by output, rose 0.5%.

Energy giant Reliance Industries, which has the highest weight on the Sensex, was down 0.8%. It had risen 6.7% in the past four sessions.

In the broader market, gainers led losers in a ratio of 1.5:1 on volume of 163 million shares.

The 50-share NSE index was down 0.1% at 5,194.


MMTC jumped 22.1% to Rs34,840 after the state-run trading firm said it would consider a bonus issue and stock split on 29 June.

Mahindra Satyam was down 1.4% at 87.65 rupees after the IT services firm said on Monday it had sought more time from authorities to file financial statements relating to fiscal years 2008 and 2009, delaying its merger with Tech Mahindra.

Tech Mahindra was down 0.9% at Rs732.90.