Indian shares end lower after earlier hitting 23-month highs

Tue Dec 11, 2012 5:25pm IST

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* BSE ends down 0.12 pct; NSE falls 0.17 pct
    * IT, rate-sensitive stocks fall
    * NMDC gains on brokerage upgrade

    By Manoj Dharra
    MUMBAI, Dec 11 (Reuters) - India's main NSE index edged
lower on Tuesday after earlier hitting a nearly two-year high as
data showing a continued high trade deficit renewed concerns
about the current account deficit, spurring investors to book
profits.
    Indian shares rallied last week after the government won the
vote for FDI in retail in both the houses of parliament but
gains have stalled this week as market participants wait for
further reform bills, including banking reforms bill to get
cleared in the ongoing winter session.
    Traders are now waiting whether the parliament will pass the
banking amendment bill that would provide licences to
non-financial companies, which is seen as an important measure
to sustain a rally in Indian shares.
    "Basically market has seen a rally and in the near term
market would remain flat for a while as people will look at
allocations for the next year," said Sonam Udasi, head of
Research, IDBI Capital.
    Mood will still be sanguine because of reform optimism
around. Key for market to move higher would be divestment and
other reforms helping fiscal deficit situation.
    The broader NSE index fell 0.17 percent, or 10.10
points, to end at 5,898.80 after earlier hitting the highest
level since Jan. 07, 2011.  
    The benchmark BSE index fell 0.12 percent, or 22.55
points to end at 19,387.14, after earlier gaining as much as 1 
percent to hit its highest since April 27, 2011.
    Concerns about the country's current account deficit
pressured shares after data showed the trade deficit remained
high at $19.3 billion in November. 
    The concerns about the country's finances is highlighting
the importance of the government's disinvestment programme,
which is taking place amidst signs of a pick up in the initial
public offer market.
    India is looking to sell up to $1.1 billion stake in state
miner NMDC, while the telecommunications tower unit of
top Indian phone carrier Bharti Airtel Ltd is set to
raise up to $832 million this week. 
 
    Export-driven technology shares were among the leading
decliners due to outlook concerns. The benchmark IT index
 has fallen 5.52 percent so far this month,
underperforming a 0.32 percent gain in the broader NSE index.
    Tata Consultancy Services fell 1.4 percent, while
Infosys fell 0.8 percent.
    Rate-sensitive stocks also saw selling pressure ahead of the
industrial output data on Wednesday and inflation data on
Friday, which will set expectations ahead of the Reserve Bank of
India's policy-setting meeting on Dec. 18.
    State Bank of India fell 0.5 percent, while Tata
Motors Ltd fell 0.7 percent.
    Property stocks also fell on profit-taking after recent
strong gains, with DLF ending down 1.9 percent lower,
while Housing Development & Infrastructure lost 2.1
percent.
    However, among gainers, NMDC rose 3.1 percent after Barclays
upgraded the stock to 'overweight' from 'underweight', citing
favourable pricing dynamics in the domestic iron ore markets.
 
    India's Kingfisher Airlines gained 4.7 percent
after newspaper Mumbai Mirror reported Gulf carrier Etihad
Airways is close to buying a 48 percent stake in the debt-ridden
carrier, without citing any sources. 
    Post market, Kingfisher denied the newspaper report that it
had reached an agreement on selling a 48 percent stake to Etihad
Airways.
    But said it is in discussions with various investors,
including Etihad, for equity investments in the company, but
matters are merely at negotiation stages, it said in a statement
to the stock exchange.

     FACTORS TO WATCH                                           
  
* Euro rises, Bunds extend fall after German ZEW data     
* Oil up near $108 on weak dollar; M. East tension         
* European shares dip, euro steady ahead of ZEW, Fed 
* 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                                   
                           
   TOP NEWS:                                                    
   For top Asian company news, double click on:       
   U.S. company news  European company news  
   Forex news        Global Economy news  
   Technology news  Telecoms news        

 (Additional reporting by Abhishek Vishoi; Editing by Rafael Nam
and Anand Basu)
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