Indian shares end lower on derivatives expiry day

Thu Jan 31, 2013 5:30pm IST

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* BSE ends 0.55 pct lower; NSE falls 0.35 pct
    * ICICI Bank Q3 net up 30.2 pct, beats forecast
    * State-run banks rally after reporting better asset quality

    By Manoj Dharra
    MUMBAI, Jan 31 (Reuters) - Indian shares fell on Thursday,
led by ICICI Bank which was hit by profit-taking after
beating earnings forecasts, while the expiry of January
derivatives kept trading volatile towards the end of the
session.
    The BSE index added 2.4 percent in January to post
its third-straight monthly gain and its longest winning streak
since gaining for four consecutive months from June to September
in 2010.
    The gains were sparked by strong continued foreign net
inflows, which reached 208.1 billion rupees ($3.90 billion) as
of Jan. 30. 
    Analysts attribute January's gains to the government's
efforts at additional fiscal reforms, but shares have fallen
1.04 percent since the central bank disappointed on Tuesday with
a cautious stance on interest rates despite cutting them for the
first time in nine months.
    The outlook for stocks largely depends upon how the
government handles its current account deficit and how the
budget pans out.    
    "Next month will be critical from the Indian budget point of
view, so that will occupy most of the mind space of traders and
investors," said Jagannadham Thunuguntla, head of research, SMC
Investments and Advisors Ltd. 
    "RBI will watch the budget data carefully and the impact it
will have on inflation and rupee movement and take further
decisions depending on that." 
    The benchmark BSE index fell 0.55 percent, or
110.02 points, to end at 19,894.98, a shade below the
psychologically important 20,000 mark. 
    The broader NSE index fell 0.35 percent, or 21
points, to end at 6034.75 on the last day of derivatives expiry.
    January derivatives expired on Thursday. The last day of
these contracts can typically lead to volatility in cash
markets, especially towards the end of the session.
    Dealers are now watching for earnings of companies like
Bharti Airtel, BHEL and auto sales numbers
for sectoral cues.
    Bharti Airtel shares ended 1.45 percent lower
ahead of December quarter earnings.
    ICICI Bank Ltd shares ended 1.8 percent lower,
after earlier hitting their highest since Nov. 16, 2010, on
profit-taking after India's No. 2 lender beat forecasts with a
30.2 percent rise in net profit for the third quarter.
 
    Its shares have risen 6.5 percent this month as of
Wednesday's close on hopes of rate cuts and better earnings.
    Colgate Palmolive India Ltd shares fell 2.52
percent after reporting lower-than-expected volume growth at 8
percent, the lowest in the past 15 quarters. 
    Among banks, the state-owned ones, which have cheaper
valuations than private sector peers, rallied after reporting
improved asset quality in the October-December quarter.
    Punjab National Bank rose 9.41 percent, its
biggest gain since May 18, 2009, while Union Bank of India
 shares ended 5.9 percent higher. 
 
    Lupin Ltd shares ended 0.83 percent higher after
the Mumbai-based drugmaker's net profit and margins beat
expectations in the quarter ended in December. 
     Jet Airways shares gained 4.46 percent on news a
stake sale deal with Abu Dhabi's Etihad Airways will be
finalised in a week or so, an executive at the airline, who
declined to be named, said on Thursday. 
    
 FACTORS TO WATCH                                              
* Euro slips from 14-mth high as weak German data         
* Brent holds near $115 on global economy revival hopes    
* German jitters hit European shares, euro           
* 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:       
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   Forex news        Global Economy news  
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 (Reporting by Manoj Dharra; Editing by Prateek Chatterjee)
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