Sensex falls in October; eventful week ahead

Sensex falls in October; eventful week ahead

Mumbai: Indian shares posted their first monthly decline in five, but closed 0.5% higher on Friday, propped up by a late surge in ICICI Bank, which soared after posting better-than-expected quarterly earnings.

Investors await an eventful week -- marked by US Federal Reserve’s 2-day meet ending Wednesday, Reserve Bank of India’s policy review on Tuesday and Coal India’s listing on the bourses on Thursday -- for directional cues.

Most economists in a Reuters poll on Thursday expected the central bank to raise rates by at least 25 basis points to rein in stubbornly high inflation in the fast-growing economy. It would be the sixth increase since mid-March.

Top private lender ICICI Bank rose 6.5%, its best single-day gain in more than 15-month, as it beat forecasts with a 19% rise in quarterly net profit, helped by robust credit growth and fewer bad debts.

The stock rose as much as 7.7% to Rs1,174, its highest level since February 2008.

The 30-share BSE index edged up 0.46% or 91.30 points to 20,032.34, with only nine of its components closing in the green.

“There is not much to read in this month’s decline. There were just bouts of profit sales after the rally we saw in September," said Rakesh Rawal, head of private wealth management at brokerage Anand Rathi.

It declined 0.2% this month, first monthly drop after May. The benchmark index had gained 11.7% in September which was its best gain in 16-month.

“It is not a panic situation or a sign of big worry," said Rawal, adding he expected Sensex to test a new record high by end-December.

The 30-share index is still up 14.7% year to date, as foreign funds have invested $24.7 billion in Indian equities in the period. It is around 1,200 points away from its all-time high witnessed in January 2008.

Though most earnings did not disappoint the street, they lacked big positive surprises, which investors had started to factor in the price, Rawal said.

India along with Singapore, Indonesia, Thailand and Philippines slowed in terms of earnings momentum in the last three months from the previous 3-month while Hong Kong, China and Malaysia showed an improvement, UBS said in a note on Thursday.

Cigarette-to-hotel business ITC firmed 2.3% as its September quarter net profit rose 23.5%.

Metals pack lost sheen as base metals fell across the board ahead of US GDP data later in the day and the Fed meeting next week.

Non-ferrous metals producer Sterlite Industries and aluminium producer Hindalco dropped 1.1% and 2.8% respectively, and Tata Steel, world’s seventh-largest maker of the alloy shed 2.4%.

Explorer Cairn India closed 0.7% higher after its September-quarter consolidated net profit more than trebled.

State-run explorer Oil & Natural Gas Corp shed 0.4% after it posted a 6-percent rise in quarterly profit on higher earnings from crude sales, but missed street estimates on higher subsidy payouts.

Market breadth was negative as declining shares outnumbered advancing ones in a ratio of 2.5:1 on a moderate volume of 434 million shares.

The 50-share NSE index firmed 0.5 % to 6,017.70 points.

World stocks declined with the MSCI world equity index trading 0.3% lower at 04:40 pm, as guessing game over the Fed’s likely monetary easing weighed.