Sensex ends lower; factory data disappoints

MUMBAI Mon Nov 12, 2012 5:18pm IST

A broker monitors share prices at a brokerage firm in Mumbai August 9, 2011. REUTERS/Danish Siddiqui/Files

A broker monitors share prices at a brokerage firm in Mumbai August 9, 2011.

Credit: Reuters/Danish Siddiqui/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - The Sensex ended slightly lower on Monday after a surprise contraction in industrial production and other data showing a fall in exports and high consumer inflation deepened fears about the economy, hitting capital good stocks especially hard.

However, United Spirits (UNSP.NS) shares posted their biggest single-day share gain since at least 1995 after its stake sale to Diageo spurred upgrades from several analysts, who called the deal "transformational" and a "game changer".

The weak data is due to add pressure on the government to take more action to revive growth after already announcing a slew of fiscal and economic measures in September, including opening up the multi-brand retail sector to foreign investors.

That's especially the case as the Reserve Bank of India has signalled it won't cut interest rates until the January-March quarter, shifting the focus to the parliament session due to re-start on November 22.

"Focal point for the near term direction would remain how the parliament session goes," said Aneesh Srivastava, Chief Investment Officer of IDBI Federal Life Insurance.

"Focus would be on decision making and reforms," he said.

The Sensex fell 0.07 percent, or 13.34 points, to end at 18,670.34.

The 50-share NSE fell 0.04 percent, or 2.55 points, to 5,683.70.

Both indexes fell for a third consecutive session.

Markets will be opened on Tuesday for a short trading session during the Diwali public holiday, and will close on Wednesday.

Capital good stocks were among the day's leading decliners after industrial output unexpectedly fell 0.4 percent in September, well below expectations for a 2.8 percent advance.

The manufacturing output slumped 1.5 percent from a year earlier, the data showed, sending Larsen & Toubro Ltd (LART.NS), India's top construction and engineering company, down 0.9 percent.

Smaller rival Punj Lloyd Ltd (PUJL.NS) fell 1.4 percent.

Other data on Monday showed India's trade deficit last month reached $20.9 billion as exports fell but imports jumped, while consumer price inflation rose 9.75 percent in October.

Companies posting weak earnings also suffered on Monday. Tata Steel Ltd (TISC.NS) fell 1.7 percent after reporting a surprise July-September loss on Friday as weakening demand and prices in its main European market offset a solid performance at home.

Shares in Tata Steel, which also said it did not expect an improvement any time soon due to weak market conditions, have fallen 4.9 percent over the past two sessions.

Coal India (COAL.NS), the world's largest coal producer, fell 0.6 percent after it narrowly missed estimates with a 19 percent rise in second-quarter profits on Friday.

Jaypee Infratech (JYPE.NS), which builds roads and other infrastructure projects, retreated 1.6 percent after saying on Monday its July-Sept net profit fell 41.8 percent from a year earlier.

However, among gainers, United Spirits (UNSP.NS) surged 34.7 percent, hitting earlier its highest since January 2008 after Morgan Stanley, J.P.Morgan and CLSA raised their ratings to the equivalent of a buy.

Brokerages said United Spirits will substantially cut its debt and improve its profits after agreeing to sell a 53.4 percent stake to Diageo (DGE.L) for $2.1 billion.

State Bank of India (SBI.NS) rose 1.6 percent after Standard Chartered said the country's biggest lender over-estimated its gross slippage for the July-September quarter, according to an email sent to clients.

The rise in bad debts reported as part of its July-September earnings had sent SBI shares down 3.9 percent on Friday.

Shares in L&T Finance Holdings Ltd (LTFH.NS), a unit of L&T, surged 11.6 percent on hopes it would be a strong contender to earn a banking license, after a senior Finance ministry official on Thursday said India could allow new banks by the end of 2012/13 fiscal year.

IDFC Ltd (IDFC.NS), another company seen as a strong contenders for a banking license, rose 2.9 percent.

(Additional Reportoing by Abhishek Vishnoi; Editing by Rafael Nam)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Republic Day

Reuters Showcase

RK Laxman Dead

RK Laxman Dead

'Common Man' cartoonist RK Laxman dead at 93  Full Article 

Banking Revolution

Banking Revolution

India turns to corner shops, mobile phones for banking revolution.  Full Article 

Nuclear Group

Nuclear Group

China urges India to take steps to satisfy standards of NSG  Full Article 

Gold Market

Gold Market

Chinese gold demand holds up ahead of holiday, Indian buying weak  Full Article 

India-U.S. Relations

India-U.S. Relations

Column - U.S. and India should join to balance China's rise  Full Article 

Padma Bhushan

Padma Bhushan

India honours Bill Gates with civilian award  Full Article 

Fashionable Modi

Fashionable Modi

When Modi met Obama, his name was all over - his suit  Full Article 

Nuclear Deal

Nuclear Deal

Obama reveals nuclear breakthrough on landmark India trip  Full Article 

Australian Open

Australian Open

Venus fireworks illuminate Australia Day  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage