Indian shares end flat; NTPC drops ahead of share sale

Wed Feb 6, 2013 5:08pm IST

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* BSE ends 0.1 pct lower; NSE 0.04 pct higher
    * NTPC share auction floor price set at 4.5 pct discount

    MUMBAI, Feb 6 (Reuters) - Indian shares ended flat after
sluggish trading on Wednesday as mortgage lender HDFC Ltd
 gained on expectations a cut in its prime lending rate
would lead to higher loan growth, while NTPC Ltd 
slipped ahead of a stake sale.
    Shares touched a more than four-week low, having steadily
lost ground ever since the central bank last week reduced
expectations about future rate cuts with a cautious statement on
future monetary policy.
    In the near-term, investors are focused on upcoming stake
sales in state-run companies, including around 120 billion worth
of shares in state power utility NTPC on Thursday.
 
    Earnings are also in focus, with ACC Ltd and Ambuja
Cements Ltd results due on Thursday, while Mahindra &
Mahindra Ltd, Sun Pharmaceutical Industries Ltd
 and Hindalco Industries Ltd will report
earnings on Friday.
    The key event remains the federal budget, to be unveiled
later this month, which will provide a key test to a government
that has been pushing fiscal reforms but is also facing general
elections by 2014.
    "Some profit-booking might continue as the finance minister
has a Hobson's choice: while he has to set the economy right, he
has to also ensure that the budget is a bit populist in the
light of pending elections," said Paras Adenwala, Managing
Director & Principal Portfolio Manager, Capital Portfolio
Advisors 
    The BSE index fell 0.1 percent, or 20.10 points, to
end at 19,639.72, marking its lowest close since Jan. 1.
    The broader NSE index rose 0.04 percent, or 2.30
points, to end at 5,959.20.
    NTPC fell 2.35 percent ahead of Thursday's share sale. Steel
Authority of India Ltd fell 4.5 percent on worries the
government's planned stake sale will have to be at a discount to
attract interest as there are concerns about the company's
earnings outlook. 
    The floor price for NTPC's share sale has been set at 145
rupees, or a 4.5 percent discount to the share's Wednesday
close. 
    ICICI Bank Ltd shares fell 0.9 percent, while HDFC
Bank Ltd ended 0.7 percent lower, posting their fourth
fall in five sessions on continued profit taking.
    Shares in HDFC Ltd rose 1.3 percent a day after the mortgage
lender cut its prime lending rate by 10 basis points starting
Wednesday, which could boost loan growth despite the hit to
margins. 
    India's Jubilant Foodworks Ltd rose 9.1 percent
after Deutsche Bank upgraded its rating on the company to "buy"
from "hold", saying the recent underperformance of shares did
not properly factor in the fast food chain operator's ability to
sustain "strong" earnings growth. 
    Shares of private sector Indian power producers gained on
media reports the cabinet has given preliminary approval to
price coal by averaging prices of domestic and imported coal. 
    The measures are intended to bring down coal prices, but
details still need to be fleshed out, according to the reports,
including from The Economic Times. (link.reuters.com/hum75t)
 
    Lanco Infratech Ltd shares rose 3.6 percent while
Adani Power Ltd rose 0.35 percent.
    

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