Sensex ends lower; Tata Motors skids on JLR worries

A broker looks at a computer screen as he talks on a phone at a stock brokerage firm in Mumbai December 3, 2012.

MUMBAI (Reuters) - The Sensex fell on Thursday as Tata Motors Ltd (TAMO.NS) slumped after the company issued a profit warning at its key Jaguar Land Rover unit, while Reliance Industries (RELI.NS) retreated as an expected increase in gas prices may be less favourable to private companies.

Housing Development & Infrastructure Ltd (HDIL.NS) tumbled on speculation the property developer was facing financial trouble, despite a denial from a senior executive. (Read full story here)

However, Larsen & Toubro Ltd (LART.NS) provided some positive news as its shares rose after its October-December earnings showed order inflows above expectations.

Investors are gearing up for more results from blue chips such as Maruti Suzuki India Ltd (MRTI.NS) and a critical Reserve Bank of India decision on interest rates on Tuesday while expectations from the budget remain high.

"The earnings season so far is fairly in line, but budget, RBI policy are the next big cues," said Nilesh Shetty, Fund Manager at Quantum Asset Management Company.

"Valuations are not as attractive compared to a year ago, What worries me is the kind of stocks moving higher now," Shetty added.

The Sensex fell 0.51 percent, or 102.83 points, to end at 19,923.78.

The Nifty fell 0.58 percent, or 34.95 points, to end at 6,019.35.

Tata Motors shares ended 6.26 percent lower after the company said its Jaguar Land Rover (JLR) unit was likely to report a lower profit margin in the October-December quarter. (Read full story here)

The warning, issued late on Wednesday, came as a surprise given that Tata shares had hit a record high earlier this month on a rally sparked by expectations of improving sales at JLR, and optimism about the launch of new models.

Reliance Industries (RELI.NS) ended 0.8 percent lower, as an oil ministry proposal to raise local gas prices is expected to apply with immediate effect to state-run producers such as Oil and Natural Gas Crop (ONGC.NS) but not to the private sector counterparts until April 2014.

The oil ministry would soon submit its gas pricing proposal to the cabinet, a ministry official told Reuters on Wednesday.

Reliance Communications Ltd (RLCM.NS) shares slumped 9.14 percent on Thursday, a day after its consolidated net profit fell a sharper-than-expected 44 percent to 1.05 billion rupees for the December quarter.

However, ONGC rose 1 percent on expectations of gas price increases. Bank of America Merrill Lynch upgraded its rating on the state-run oil producer to "buy" from "neutral" due to the expected benefits.

DLF Ltd (DLF.NS) gained 0.2 percent. Goldman Sachs upgraded its rating on DLF to "buy" from "neutral", citing upcoming residential project launches worth 130 billion rupees over the next three quarters.

Larsen & Toubro (LART.NS) rose 1.5 percent after the construction and engineering company reported a stronger-than-expected rise in October-December net profit and reiterated its order guidance.

(Additional reporting by Abhishek Vishnoi; Editing by Anupama Dwivedi)