BSE Sensex hits 1-1/2-mth closing low as banks, Cipla shares plunge, NSE Nifty down by 20

Feb 11 2013, 13:05 IST
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Sensex declines 59 points on economic growth concerns. (Reuters) Sensex declines 59 points on economic growth concerns. (Reuters)
SummaryGovt economic growth forecast made investors flee the markets.

Hit by weak GDP growth estimates, the Sensex today fell by 59.40 points to close at one-and-a-half month low of 19,580.32, completing six days of losses – the longest string since November.

The Bombay Stock Exchange (BSE) sensitive index resumed lower at 19,589.44 and hovered in a range of 19,702.56 and 19,540.08 before concluding the day at the calender year's low of 19,580.32 -- a fall of 59.40 points or 0.30 per cent.

It has now lost 425 points in six sessions. During November 9-16, it had fallen for five straight sessions.

The NSE 50-share Nifty today ended lower by 20.40 points, or 0.34 per cent, at 5,938.80.

Shares of consumer durables, realty, power, metal and capital goods declined sharply as these indices declined between 1.12 percent and 3.34 per cent.

Sterlite Ind with 2.92 per cent losses led the 18 Sensex losers, followed by NTPC, Cipla, Bharti Airtel and Tata Power.

However, rise in TCS, M&M, Tata Motors, Infosys and HDFC restricted the fall to some extent.

"A weaker than expected GDP number at 5 per cent disappointed the market sentiment and led to selling pressure across all major sectors," said Nidhi Sarswat, Senior Research Analyst, Bonanza Portfolio Ltd.

Earlier today, Central Statistics Office said country's economic growth rate this fiscal is estimated to be sharply lower at 5 per cent as against 6.2 per cent last year.

According to the Finance Ministry, CSO's economic growth projection of 5 per cent "is below expectations" and the government will continue efforts to revive the economy.

"Benchmark indices may turn volatile in the coming days amid various economic data points to be announced. The IIP numbers will be announced next week," said Amar Ambani, Head of Research, IIFL.

Asian stocks, barring Taiwan that ended up, closed mostly lower following mixed cues from Wall Street and ahead of European Central Bank's policy decision later today.

However, Europe was trading higher in early trades as stock indices in France, Germany and UK were up marginally.

Back home, 18 out of 30 Sensex-based scrips closed down and 12 counters settled higher.

Major losers from the Sensex were Sterlite Ind (2.92 pc), NTPC (2.72 pc, Cipla (2.61 pc), Gail India (2.29 pc), Bharti Airtel (2.08 pc), Tata Power (1.97 pc), Tata Steel (1.66 pc), Hero MotoCorp (1.65 pc), Jindal Steel (1.37 pc), BHEL (1.22 pc), L&T (1.22 pc), SBI (1.02 pc) and ICICI Bank (0.84 pc).

However, M&M rose by 1.26 per cent, followed by TCS (1.20 pc), Tata Motors (0.89 pc) and Infosys (0.56 pc).

Among the sectoral indices, the BSE-CD dipped by 3.34 per cent, followed by BSE-Realty (1.47 pc, BSE-Power (1.39 pc), BSE-Metal (1.16 pc) and BSE-CG (1.12 pc).

The market breadth turned negative with 1,378 shares losing ground as against 799 finishing up. 786 stocks were unchanged.

The total turnover was relatively up at Rs 2,189.41 crore from Rs 2,097.69 crore yesterday.

Foreign institutional investors continued their buying spree by investing a net Rs 1,137.95 crore yesterday as per provisional data from the stock exchanges.

Sensex declines 59 points on economic growth concerns

(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.

FACTORS TO WATCH

* Euro edges higher but vulnerable to ECB meeting

* Oil rises above $117 ahead of ECB meeting

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