Indian shares fall to 2-week low; inflation data awaited

Thu Dec 13, 2012 4:39pm IST

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* BSE index falls 0.65 pct; NSE ends 0.62 pct lower
    * Indian shares fall for fifth straight session
    * Consumer stocks such as Hindustan Unilever, ITC decline
    * Tata Motors gains on hopes of higher JLR sales

    By Abhishek Vishnoi
    MUMBAI, Dec 13 (Reuters) - India's BSE index fell for a
fifth session on Thursday, with ITC slumping as index provider
FTSE lowered its free float weighting and Hindustan Unilever
extending falls on concerns it may have to pay higher royalty to
parent Unilever Plc. 
    Foreign portfolio inflows touched $21.42 billion this year,
helped by optimism over reform measures, but equities have
started looking overbought to market participants, a concern
underscored by India's 50-share index closing below the 5,900
level for the third day.
    Profit-booking was higher as investors awaited the outcome
of inflation numbers on Friday, which will set the tone for the
central bank's policy meeting on Dec. 18. 
    Wholesale prices likely rose 7.60 percent in
November from a year earlier, compared with 7.45 percent in
October, a Reuters poll showed. 
    "Inflation is really important as it may set the pace for a
CRR cut at least in December, but rate cut would happen only in
January," said Sandeep J Shah, CEO, Sampriti Capital. 
    Consumer inflation numbers have already risen, and wholesale
price index cannot be looked in isolation, added Shah.
    The benchmark BSE index fell 0.65 percent, or 126
points, to end at 19,229.26, its lowest close in two weeks.
    The broader NSE index fell 0.62 percent, or 36.50
points, to end at 5,851.50, closing below the psychologically
important 5,900 level for the third day.
    Index heavyweight ITC fell 3.5 percent after FTSE
lowered its free float weighting for the cigarette maker in its
global equity index series, according to the website of the
index provider. 
    India's Hindustan Unilever fell 1.9 percent on
Thursday, down for the second day, on concerns that it may face
higher royalty payments to its parent Unilever PLC.
 
    Cement maker ACC fell 1.8 percent after the board
approved payment of technology and knowhow fees to its parent
Holcim Limited.     
    However, among stocks that gained, Tata Motors 
rose 4.1 percent, ahead of Jaguar Land Rover unit's
wholesale volume numbers. 
    Shares in non-banking finance companies gained after the
Reserve Bank of India unveiled draft capital guidelines for the
sector that are seen less stringent than feared.
    Mahindra and Mahindra Financial Services rose 1.2
percent, while LIC Housing Finance ended 0.3 percent
higher.
   
   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Swiss franc edges up versus euro after SNB announcement 
* Brent slips towards $109 on stockpiles, fiscal concerns  
* European shares soften after Fed's stimulus plan   
* 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        
   Media news       Banking news           
   Politics/General    Asia Macro data      <ECONASIA 

 (Editing by Jijo Jacob)
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