Indian shares edge lower on profit-taking; IT stocks hit

Fri Dec 7, 2012 5:04pm IST

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* BSE index falls 0.32 pct; NSE ends 0.4 pct lower
    * Retail shares end mixed after FDI approval in upper house
    * Government to focus on financial sector reform bills next
week

    By Abhishek Vishnoi
    MUMBAI, Dec 7 (Reuters) - Indian shares fell on Friday on
profit-taking after the government expectedly won a vote for
foreign investment in retail in the upper house of parliament,
while technology stocks such as Infosys extended declines on
worries over sector's revenue outlook. 
    While India's Parliamentary Affairs Minister Kamal Nath said
victory in parliament vote on retail opens way for financial
sector reform bills to be taken up next week, some market
participants argue that the reform optimism-led buying may give
way to a technical correction. 
    India's benchmark index rose 26.1 percent in 2012 as of
Thursday's close, outperforming all its peers among the BRIC
nations.  For graphic: link.reuters.com/quj54t
 
    Optimism around reform measures by the government has been
rewarded by foreign inflows of $20.51 billion this year, but on
the flip side, equities have now started looking overbought
based on technical analysis indicators, dealers say.
 
    "Market may see some profit booking on technicals but we
would be buyers on declines as there are enough triggers for
market to perform in the form of other bills in the parliament,"
said G. Chokkalingam, Chief Investment Officer, Centrum Wealth
Management.
    The benchmark BSE index fell 0.32 percent, or 62.70
points, to end at 19,424.10, while gaining 0.43 percent for the
week on the government's reform push.
    Sensex is trading in the "overbought" territory, with its
14-day relative strength index above 70 for the sixth day. 
    The broader NSE index fell 0.4 percent, or 23.50
points, to end at 5,907.40, but gaining 0.46 percent for the
week.
    India's inflation data for November and factory output data
for October scheduled to be released on Wednesday are also key
data points to determine the near term direction ahead of the
RBI's monetary policy meeting on Dec. 18. 
    Among the decliners, Infosys fell 0.73 percent on
concerns over its growth outlook.
    Infosys' dollar revenue growth outlook of 5
percent for the year ending March 2013 could be under threat,
Chief Executive S.D. Shibulal was attributed as saying by UBS in
an investor meet. 
    Infosys closed down 0.73 percent, Tata Consultancy Services
 ended 1.29 percent lower while HCL Technologies
 fell 1.8 percent. 
    Nomura also warned that the possibility of an organic
revenue growth outlook cut by Infosys in the third quarter of
current fiscal year remains high . 
    It prefers companies with current business momentum like HCL
Technologies, Cognizant Technology Solutions 
and Tata Consultancy Services.
    Hexaware Technologies fell 9.25 percent, marking
its biggest single day fall since Feb. 24, 2011, after it
lowered its fourth-quarter revenue outlook.
    The company now expects revenue for the December quarter at
$92 million, down from an earlier outlook of $94.7 million to
$96.5 million. 
    Indian drugmaker Claris Lifesciences Ltd fell 3.8
percent on profit booking, after it said it will form a joint
venture with Japan's Otsuka Pharmaceutical Factory and  Mitsui &
Co Ltd for its medical infusion drugs business in India
and emerging countries. 
    Retail stocks ended mixed - Pantaloon Retail India 
rose 1.4 percent while Shopper's Stop fell 1.9 percent
after upper house of parliament approved FDI in supermarkets.
    However among gainers, shares in Maruti Suzuki India
 rose 1.85 percent on media reports of price hike in
January. 
    Among other auto gainers, Tata Motors rose 0.4
percent while Mahindra and Mahindra ended up 1.11
percent.
    Dealers said January may see a lot of auto manufactures
going for price hike after December inventory gets sold off.
 
    Shares in Shriram Transport Finance Co rose 0.6
percent after Morgan Stanley added the stock to its Asian banks
model portfolio with 5 percent weight. 
    
   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Euro extends falls on dismal German growth forecast     
* Oil edges above $107 before U.S. jobs report             
* Euro falls on grim economic outlook, U.S. data eyed 
* Foreign institutional investor flows          
* For closing rates of Indian ADRs                       
                       
   ASIA-PACIFIC STOCK MARKETS:                                  
Pan-Asia........ Japan.......   S.Korea... 
S.E. Asia.......        Hong Kong...  Taiwan.... 
Australia/NZ....        India.......  China..... 
                        
   OTHER MARKETS:                                               
Wall Street ....         Gold ....... Currency.. 
Eurostocks.....         Oil ........  JP bonds... 
ADR Report .....       LME metals. US bonds.. 
Stocks News US.. Stocks News Europe     
                       
   DIARIES & DATA:                                              
Indian Data Watch   Asia earnings diary 
U.S. earnings diary     European diary       
Indian diary          Wall Street Week Ahead  
Eurostocks Week Ahead                                   
                         
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 (Additional reporting by Manoj Dharra; Editing by Anand Basu)
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