Indian shares fall ahead of rate decision; Tech stocks hit

Mon Dec 17, 2012 4:42pm IST

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Stocks

   

* BSE index falls 0.38 pct; NSE ends 0.37 pct lower
    * RBI widely expected to keep rates unchanged on Tuesday
    * Rate-sensitive stocks rally on hopes of CRR cut

    By Abhishek Vishnoi
    MUMBAI, Dec 17 (Reuters) - Indian shares fell on Monday, led
by a decline in Tata Consultancy Services, which was hit by
worries over its outlook ahead of a meeting with analysts, while
Bharti Airtel fell after a unit priced its upcoming IPO at the
lower end of an indicative price range. 
    Caution also set in a day before the Reserve Bank of India's
policy review. The central bank is widely expected to hold off
on easing interest rates but may signal a more dovish stance. 
 
    Interest-rate sensitive stocks such as ICICI Bank 
and Tata Motors gained as a result, with some analysts
also expecting the RBI to cut the cash reserve ratio for banks.
    Goldman Sachs, however, said it expects RBI to cut interest
rate by 25 basis points on Tuesday after inflation was data was
much lower than expected. The contrarian view was not widely
shared by other analysts. 
    "The market are in a wait-and-watch mode ahead of monetary
policy and larger picture of U.S fiscal "cliff" related
negotiations," said Jagannadham Thunuguntla, head of research at
SMC Investments and Advisors Ltd.
    The probability of a CRR cut is much higher on Tuesday,
added Thunuguntla. 
    The benchmark BSE index fell 0.38 percent, or 72.83
points, to end at 19,244.42, falling for the sixth session in
seven.
    The broader NSE index fell 0.37 percent, or 21.70
points, to end at 5,857.90, closing below the psychologically
important 5,900 level, for a fifth day.
    Tata Consultancy Services fell 3 percent on caution
ahead of a scheduled meeting between the management and analysts
later in the day amid concerns the software services provider
will deliver a downcast view on the sector. 
    Infosys fell 0.55 percent. India's no. 2 software
services provider may  may cut its revenue forecast next month
as U.S. business clients defer spending and balk at signing big
deals. 
    Bharti Airtel shares ended 3.8 percent lower on
Monday after unit Bharti Infratel's initial public offer
received a lower-than-expected response from investors.
 
    Although Bharti Airtel did not sell any of its shares as
part of the planned listing of its telecommunications tower
unit, traders expressed disappointment that the pricing had been
set at the lower end of earlier suggested bandŸ. 
  
    Stocks in non-banking financial companies such as L&T
Finance Holdings fell 1.4 percent, while Mahindra and
Mahindra Financial Services fell 1.8 percent, on
profit-taking after surging this year on hopes parliament will
approve a bill laying the groundwork to issue banking licences.
 
    However, some rate-sensitive stocks rose, with State Bank of
India up 1 percent and ICICI Bank up 0.7 percent ahead of the
central bank's policy review on Tuesday. 
    Tata Motors gained 0.7 percent, up for a third day
, after stronger-than-expected November sales at Jaguar Land
Rover (JLR) reduced concerns about the outlook for the key unit
of the Indian auto maker. 
    Among other gainers, Fortis Healthcare soared 6.9
percent on Monday to a 13-month high after announcing the sale
of its 64 percent stake in its Australia dental business for
A$270 million ($285 million). 
    India's Jet Airways rose 2.4 percent after earlier
jumping as much as 4.7 percent to its highest in nearly two
years on hopes Abu Dhabi's Etihad Airways will buy a stake in
the carrier. 
    India's Mint Newspaper reported on Monday that Etihad may
decide as early as this week whether it will invest in Jet
Airways or in grounded rival Kingfisher Airlines,
citing two people familiar with the matter. 
    Mint also quoted one of the people as saying Jet Airways had
the edge in terms of attracting Etihad's investment. 
    Kingfisher Airlines ended 4.8 percent lower.
 
   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Japan election result knocks vulnerable yen             
* Brent stays above $108, China hopes support              
* Dollar surges on Japan vote, U.S. budget weighs    
* 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 

 (Additional reporting by Manoj Dharra; Editing by Sunil Nair)
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