Indian shares fall on profit-taking; SBI drops, oil companies gain

Mon Jan 7, 2013 5:24pm IST

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Stocks

   

* BSE end down 0.5 pct; NSE ends 0.46 pct lower
    * Oil companies shares rally on hopes of fuel price hike
    * Goldman Sachs sees Nifty touching 7,000 by December

    By Manoj Dharra
    MUMBAI, Jan 7 (Reuters) - Indian shares fell on Monday for
the first time this year as investors took profit in recent
out-performers such as State Bank of India after a four-day
winning streak had sent indexes to two-year highs. 
    However, oil companies such as Hindustan Petroleum Corp
 extended gains on expectations the government will
gradually raise the price of diesel.
    Markets were due for some consolidation after gaining in
each of the four previous sessions of 2013 and ahead of
industrial output data on Friday and corporate earnings due this
month, traders said.
    The underlying sentiment is still positive as the central
bank is widely expected to cut interest rates at its Jan. 29
policy review, which could help revive flagging economic growth.
   
    "Third-quarter earnings would not be great but it will
probably be the last quarter of such earnings after which the
outlook would improve significantly," said Gautam Trivedi,
managing director and head of equities India, Religare Capital
Markets.
    "We expect a 50 basis points cut between now and March by
RBI (Reserve Bank of India)," he added.
    The BSE index fell 0.47 percent, or 92.66 points,
to end at 19,691.42, after gaining 1.84 percent in the previous
four sessions. The index closed on Friday at its highest since
Jan. 6, 2011. 
    The broader NSE index ended 0.46 percent down, or
27.75 points, at 5988.40, below the psychologically important
6,000 level.
    Goldman Sachs maintained its 'overweight' call on Indian
stocks, with an end-2013 target for the NSE, or Nifty, of 7,000.
 
    Investors took profits in recent out-performers, especially
those that shone in 2012 and helped the BSE index rise 25.7
percent for the year.
    State Bank of India ended 0.77 percent lower after
gaining 4.24 percent this year as of Friday's close and 47.3
percent in 2012, while HDFC Bank ended 1.64 percent
down.
    Oil and gas company Reliance Industries was also
hit by profit-taking, ending 0.6 percent down after adding 2.7
percent so far this year.
    Engineering company Larsen & Toubro Ltd ended 2.45
percent lower on worries its October-December earnings would not
be sturdy, given the slowing domestic economy.
    L&T is focusing on ramping up overseas growth to offset the
slowdown at home. It expects foreign markets to contribute up to
25 percent of revenue by 2016. 
    Among the gainers, state-run oil companies rose on
expectations the government would soon announce a hike in fuel
prices. Fuel subsidies in India are borne by the government,
marketing and refining companies, as well as explorers.
    Hindustan Petroleum Corp ended 4.9 percent higher,
while Bharat Petroleum Corp rose 3.1 percent. 
    Separately, officials of state-owned oil companies told
Reuters that they received the first tranche of 100 billion
rupees on Jan. 3 as part of a cash subsidy payout for the
April-September period, and expect a second and third tranche of
an equivalent amount this month. 
    Oil and Natural Gas Corp shares ended 1.1 percent
higher, having gained 6.4 percent in previous three sessions.
    Shares of Maruti Suzuki, India's largest
automaker, rose 2.5 percent after earlier hitting a four-year
high on hopes earnings would improve due to rising sales of
passenger vehicles, while margins were also seen increasing due
to a depreciation in the Japanese yen. 
   CLSA's upgrade of Maruti to 'buy' from 'sell' also boosted
the stock, traders said. 
    Steel companies gained after the government announced an
increase in import duties for select steel products on Friday.
    Steel Authority of India gained 4.5 percent, while
JSW Steel ended 3.3 percent higher.
    For additional stocks on the move double click       
 
      
   FACTORS TO WATCH                                             
* Dollar retreats from 2-1/2 year high vs yen             
* Oil slips to $111, growth hopes support                  
* Shares, oil slide, but growth outlook limits falls 
* 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       
 
 



 (Additional reporting by Abhishek Vishnoi; Editing by Prateek
Chatterjee)
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