Indian shares hit 1-1/2-month closing low; banks, Cipla fall

Thu Feb 7, 2013 4:46pm IST

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* BSE index falls 0.3 pct; NSE ends 0.34 pct lower
    * Strides shares slump as investors doubt asset sale report
    * Morgan Stanley, CLSA cut India's Cipla ratings on earnings

    By Abhishek Vishnoi
    MUMBAI, Feb 7 (Reuters) - Indian shares fell on Thursday to
their lowest close in one-and-a-half months, led by a decline in
banking stocks, after government estimates showed India's FY13
growth could be worse than expected, while drugmaker Cipla Ltd
 dropped after its October-December net profit missed
estimates.
    India's slowest growth in a decade could be worse than
anticipated preliminary data released on Thursday showed. The 
economy is set to grow 5.0 percent in the fiscal year ending
next month, compared with central bank's forecast of 5.5
percent. 
    Caution also prevailed as investors awaited the European
Central Bank's policy meeting later in the day and President
Mario Draghi's views on the region's growth outlook. 
    Analysts say consolidation is expected to continue ahead of
the 2013/14 federal budget to be announced later this month,
which is seen as a key test of the government's commitments to
shore up its finances.
    "The market perhaps wants to consolidate before any next
move, ahead of the Budget, which can be a bit populist," said
Vijay Kedia, director at private wealth management firm Kedia
Securities.
    The key things to watch for now are how many more reforms
come and how soon they get implemented, to stoke growth and
avoid rating cuts, added Kedia.
    The benchmark BSE index fell 0.3 percent, or 59.40
points, to end at 19,580.32, falling for a sixth day to mark its
biggest losing streak since Nov 21, 2011.
    The broader NSE index fell 0.34 percent, or 20.40
points, to end at 5,938.80.
    Bank stocks such as ICICI Bank Ltd fell 0.9
percent, on concerns that growth is likely to slowdown even as
inflation remains high, after government's FY 13 GDP estimates
came in lower than market expectations.
    Shares in Cipla Ltd fell 2.7 percent, a day after
the company's October-December net profit missed estimates,
which were followed by downgrades from Morgan Stanley and CLSA
citing lower-than-expected margins and earnings outlook. 
  
    State-run power utility NTPC Ltd shares fell 2.5
percent after its shares sale price was set at 145 rupees, or at
a 4.5 percent discount to its Wednesday's close. 
    NTPC's weight in MSCI India index would rise
from 0.63 percent to 1.79 percent as the company's free float
stock increases after its offer for sale, Citigroup said in a
note, quoting MSCI. 
    Shares in Ambuja Cements Ltd fell 3.1 percent on
expectations the company will post lower-than-expected earnings
for the October-December quarter later in the day, dealers
said. 
    India's Strides Arcolab Ltd ended 12.7 percent
lower, after falling as much as 17.4 percent in Mumbai trading
earlier on Thursday, as investors cast doubts on media reports
that the drug maker may sell its injectable-medicines unit Agila
Specialties. 
    Telecoms shares fell, tracking the sixth straight monthly
fall in India's mobile phone subscriber base which declined by a
net 25.88 million, or 2.9 percent, in December. 
    Bharti Airtel Ltd fell 2 percent, while Idea
Cellular Ltd ended 2.8 percent lower.
    However, among the stocks that gained, Indian auto
components maker Bharat Forge rose 1 percent after it
said it was forming a joint venture with Israeli defence
contractor Elbit Systems  to supply advanced
artillery and mortar systems to the Indian military.
 
    Shares in ACC Ltd, controlled by Swiss group Holcim
, the world's second-largest cement producer, ended 0.8
percent higher after its Oct-Dec net profit, met expectations.
    
    
   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Euro edges higher but vulnerable to ECB meeting         
* Oil rises above $117 ahead of ECB meeting                
* Shares, euro edge up ahead of ECB meeting          
* 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                                   
                         
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 (Editing by Anupama Dwivedi)
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