June 13, 2013 / 11:08 AM / in 6 years

Indian shares fall for third day; ignore Fitch upgrade, finmin pledge

* BSE index falls 1.12 pct; NSE ends 1.06 pct lower
    * India wholesale inflation seen within RBI comfort level in
    * RBI likely to hold rates Monday, eyeing weak rupee

    By Abhishek Vishnoi
    MUMBAI, June 13 (Reuters) - Indian shares fell for a third
consecutive session on Thursday to close at their lowest level
since April 17, after Apollo Tyres slumped as its $2.5 billion
acquisition of Cooper Tire raised concerns about debt levels,
while Sun Pharma fell after settling a patent suit with Pfizer
for $550 million.
    Shares also slid after Japanese stocks plunged over 6
percent to bear market territory and Asian shares slid to
nine-month lows on Thursday, as investors rushed for the exits
as the prospect of reduced stimulus from central banks roiled
    Fears of foreign institutional investors (FIIs) paring
positions and the central bank halting the rate cut cycle were
so strong that shares didn't react despite India's finance
minister pledging more reforms and Fitch surprisingly returning
India to 'stable' outlook.  
    Dealers now await the May headline inflation data due on
Friday, which is the last crucial data before the central bank's
rate meet on Monday.    
    "If global markets and RBI announcements are supportive then
we may seen a corrective rally soon," said Paras Adenwala,
managing director and principal portfolio manager at Capital
Portfolio Advisors.
    "Clearly, the medium term bias is down but for the sentiment
to change rupee needs to stabilise." 
    The benchmark BSE index fell 1.12 percent, or
213.97 points, to end at 18,827.16.
    The broader NSE index fell 1.06 percent, or 61.10
points, to end at 5,699.10, closing above the psychologically
important 5,700 level.
    India's headline inflation probably held near the central
bank's comfort level of 5 percent last month, giving it room to
ease policy, as commodity, food and fuel costs remained
moderate, a Reuters poll found. 
    A tumbling rupee and pressure on the current account deficit
are also likely to prevent the central bank from lowering policy
rates on Monday despite softening inflation and decade-low
economic growth, a Reuters poll showed.    
    Shares in India's Apollo Tyres Ltd fell 25.5
percent after a $2.5 billion deal to buy U.S.-based Cooper Tire
& Rubber Co raised concerns about the company's debt. 
    Apollo will fully fund the purchase through new debt,
raising the post-acquisition leverage for the combined entity to
3.8 times net debt/EBITDA (earnings before interest, tax,
depreciation and amortisation) from 1.4 times now, according to
analysts' estimates. 
    Sun Pharmaceutical Industries Ltd fell 3.2 percent
after the company settled a patent suit with Pfizer Inc 
related to its acid-reflux drug for $550 million. 
    Lenders further lost ground as high retail inflation in May
was seen virtually shutting the door on a rate cut next week,
especially after a sliding rupee reignited current account
deficit concerns. 
    ICICI Bank Ltd fell 1.2 percent while HDFC Bank
Ltd ended 1.3 percent lower.
    Tata Motors Ltd fell 3.6 percent on fears of weak
sales at unit Jaguar Land Rover Ltd, expected later
in the week.
    However, among stocks that gained, Titan Industries Ltd
 shares rose 4.5 percent after Wednesday's slump of
13.76 percent on concerns about recent measures to curb gold
imports was seen as overdone. 
    For additional stocks on the move double click       
   FACTORS TO WATCH                                             
* Equity fall lifts yen to 10-week peak versus dollar     
* Oil slips to $103 on demand worries                      
* Shares pummelled as rout gathers pace              
* 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      <ECONASIA 

 (Editing by Sunil Nair)
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