February 22, 2012 / 11:35 AM / 8 years ago

India shares end down as investors turn cautious; SBI falls 8 pct

(UPDATES TO CLOSE)	
    * Financials led by SBI, ICICI Bank drag index
    * Volatile trading expected ahead of derivatives expiry on
Thursday
    * Markets await budget, central bank policy

    By Rajesh Kurup	
    MUMBAI, Feb 22 (Reuters) - Indian shares closed down
on Wednesday, reversing early gains, as investors turned
cautious and booked profits after a recent rally that pushed up
the benchmark index to its highest close in nearly seven months
in the previous session.	
    The 30-share BSE index closed down 1.54 percent, or
283.36 points, at 18,145.25, with 24 of its components in the
red. 	
    The market is now looking towards the federal budget and
central bank policy review, both due in mid-March, for positive
triggers, dealers said.	
    Financials led the losses with the country's top lender
State Bank of India closing 8.05 percent lower at 2,255
 rupees, while its private sector rival ICICI Bank 
settled 3.39 percent lower at 957.70 rupees.	
    "The market had a run-up ahead of the budget itself and is
seeing some correction now," said Deven Choksey, managing
director of K. R. Choksey.	
    The central bank reviews policy on March 15, and the
government will unveil its annual budget the following day.	
    The market will bounce back as the budget is likely to have
some positive announcements, while the central bank may cut
interest rates at its policy review, Choksey said.	
    In the broader market, there were 1,268 losers against 
 227 gainers on volume of 1.30 billion shares.	
    "The outlook for the market is firm. There is
enough liquidity that could lead to further upside," said Suresh
Parmar, associate vice president institutional equities at KJMC
Capital Markets.	
    He said that the market could witness high
volatility on account of expiry of derivatives contract expiry
on Thursday.	
    The 50-share NSE index ended down 1.82 percent at
5,505.35.	
    "Market is set to move up. The rollovers so far suggest
investors are pretty aggressive, confident and building
positions ahead of the budget-month," Samir Gilani,
head of equities and derivatives at Mape Securities said.	
    "There is a strong institutional support to the market,"
said Gilani.	
   Kingfisher Airlines ended lower 5.98
percent after gaining in early trade after banking sources told
Reuters its lenders have not agreed to extend further loans to
the debt-crippled carrier.	
    Several newspapers had reported earlier Wednesday that State
Bank of India (SBI) would throw a lifeline to Kingfisher, which
is majority-owned by liquor baron Vijay Mallya, giving figures
ranging from 2.0 to 16.5 billion rupees ($40-335 million).
 	
    Shares in Jet Airways India closed down 9.17
percent and Spicejet down 8.89 percent, after Bank of
America Merrill Lynch retained its "underperform" rating on the
two carriers.	
    The U.S.-based investment bank cited slowing traffic growth,
strong capacity addition by low-cost carriers and insufficient
growth in yields for being "negative" on the sector.
 	
    Energy major Reliance Industries fell 1.2 percent
on profit taking, after it rallied in the previous session on
expectations of announcement of petrochemicals joint venture.
 	
    Post trading hours on Tuesday, Reliance, which has the
heaviest weight on the main index, said it had finalised a joint
venture with Sibur, Russia's largest petrochemical company, to
set up a butyl rubber plant in India. 	
    Sun Pharmaceutical ended up 1.08 percent after the
U.S. Food and Drug Administration said it reached a temporary
deal to import a cancer drug from the Indian drugmaker.
 	
     The euro and European shares edged lower on Wednesday after
economic data suggested the euro zone may slide back into
recession, hurting the global economic outlook, while concerns
about the sustainability of the latest Greek bailout deal also
weighed. 	
    	
    STOCKS THAT MOVED	
    * Welspun Corp fell 3.56 percent. HSBC
downgraded the steel pipes maker to 'neutral' from 'overweight'
and cut target price to 165 rupees from 265 rupees, after it
reported a lower-than-expected sales volume. 	
    * NTPC Ltd closed down 1.8 percent, after Deutsche
Bank downgraded the power producer to 'hold' from 'buy', citing
execution delays, challenges in coal logistics and unanticipated
policy changes as risks for the state-run company.
 	
    ($1 = 49.3100 Indian rupees)	
    	
      	
    TOP 3 BY VOLUME	
    * Lanco Infratech with 134 million shares	
    * Unitech on 67.44 million shares	
    * Sulzon Energy on 51.64 million shares	
         	
    FACTORS TO WATCH 	
 * Indian rupee report                                     INR/]	
 * Indian bond report                                      	
 * Yen drops to 7-mth low vs dollar; euro pressured      	
 * Oil retreats, dragged by weak Europe economic data      	
 * Euro, shares weaken as growth outlook darkens     	
 * U.S. stock futures mixed, economic data eyed             	
 * For closing rates of Indian ADRs                      	
 * Foreign institutional investor flows         	
   (Reporting by Rajesh Kurup; Editing by Subhadip Sircar)
     	
     	
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