Business | Markets
Weak earnings fears pull Indian shares down 1%
Indian shares shed one per cent yesterday, weighed down by weaker global markets, and as wary investors awaited quarterly earnings due later this month for direction.
- Reuters
- Published: 23:38 April 8, 2008
Bangalore: Indian shares shed one per cent yesterday, weighed down by weaker global markets, and as wary investors awaited quarterly earnings due later this month for direction.
Traders said the outlook for the reporting season was clouded by uncertainties about the fallout from the global credit crisis that has rocked markets, and lingering concerns about a US recession.
"People are also worried about extraordinary losses that companies may show in their quarterly earnings due to losses in forex and commodities-linked trading," said Jayesh Shroff, fund manager at SBI Mutual Fund.
Last month, leading private sector bank ICICI Bank said investment losses caused by market turmoil in the wake of the subprime crisis could wipe up to nine per cent off this year's profit.
Larsen & Toubro fell 5.1 per cent to Rs2,581.30, its lowest close since September 2007, on worries the engineering and construction firm's quarterly earnings would not be able to meet street expectations, traders said.
The stock has fallen more than 38 per cent so far this year, after nearly tripling in 2007.
But Bharat Heavy Electricals Ltd rose 4.7 per cent to Rs1,712.75, after HSBC said it remained "overweight" on the state-run power equipment maker's long-term growth prospects.
The 30-share BSE index ended down 1.08 per cent, or 169.46 points, at 15,587.62, after having opened up slightly and then falling as much as 1.8 per cent during trade. Twenty-five of its components ended in the red.
In the broader market, 1,401 gainers were ahead of 1,208 losers on volume of more than 254 million shares.
"We will see lot of volatility in line with the global markets. Also, there is no positive trigger that can ensure a sustained rally," said Dipak Acharya, fund manager at BoB Asset Management Company.
The BSE index, which had risen 2.7 per cent on Monday, is down more than 23 per cent this year, making it one of the worst performers in Asia in 2008.
Brokerage India Infoline said the market was likely to see alternate bouts of buying and selling, as investors would prefer to stay on the sidelines ahead of quarterly earnings reports. "Investors should be wary of bounce-backs, as these rallies could be short-lived," it said.
Reliance Industries fell 1.02 per cent to Rs2,381.25 on profit-taking, a day after it rose 3.6 per cent to its highest close since February 29.
The 50-share NSE index fell 1.08 per cent to 4,709.65.
Pakistan
Pakistan's benchmark Karachi Stock Exchange 100 Index rose 4.33 points, or 0.03 per cent, to record 15,474.07 at close.
"The market is flat this week as we are seeing an outflow of foreign funds after reaching an all-time high," said Shuja Rizvi, head of equity sales at Capital One Equities Ltd. in Karachi.
Currencies: Rupee falls
The Indian rupee fell yesterday, after hovering in a narrow band for much of the day, as hefty dollar buying by the central bank more than offset capital inflows.
The partially convertible rupee ended at 40.010/020 per dollar, below an early high of 39.960 and 0.1 per cent weaker than Monday's close of 39.96/97.
"We're pretty much stuck in a very tight band," said the chief trader with a foreign bank. "Foreign institutional investors have been buying stocks, so there's been some dollar supply from there," the trader said.
"But intervention is there to prevent (the rupee) from going too much above 40.00."
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