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Indian Shares Fall As Oil Spike Hurts

Indian shares edged lower after a positive start on Monday, as worries intensified that higher energy costs will prevent the Reserve Bank of India from lowering lending rates. U.S. stocks ended mixed on Friday and other Asian markets are trading mostly lower this morning, further dampening investor sentiment.

The benchmark 30-share Sensex is currently at 17,765, down 159 points or 0.89 percent from its previous close while the broader Nifty index is down 56 points or 1.03 percent at 5,374. Second-line stocks are also declining sharply and the market breadth is extremely negative, with declining shares outpacing gaining ones by 1236 to 725 shares on the BSE.

Sterlite Industries and Sesa Goa are tumbling 4-8 percent on merger news. NMDC is down 0.9 percent on reports it is conducting due diligence to acquire a stake in overseas projects.

Glenmark Pharmaceuticals is losing 1.3 percent after recalling seven batches of oral contraceptive tablets norgestimate and ethinyl estradiol from the United States. IRB Infrastructure Developers is down 2.4 percent despite reports that it may raise toll rates from April on a project in Karnataka. IDBI Bank is declining 1.6 percent after state-run insurer LIC agreed to subscribe up to 5 percent of its equity capital at a price to be calculated as per the SEBI regulations. Bank of Baroda is down 2.4 percent ahead of a board meet today to consider a preferential share issue to LIC/mutual funds.

Kingfisher Airlines is gaining half a percent. Chairman Vijay Mallya said in an interview with a newspaper that the cash-strapped airline is in talks with two foreign carries for a bailout. ONGC is adding a percent ahead of a ministerial meeting today to consider divesting government equity in the company.

United Spirits is rallying almost 6 percent after clarifying that it has not provided any corporate guarantee on behalf of Kingfisher Airlines.

Fertilizer stocks are edging higher after a ministerial panel on Friday recommended a new fertilizer investment policy. GNFC is posting a modest 0.3 percent gain, FACT is rising 0.7 percent and National Fertilizers is adding 2 percent. Gati is gaining 2.7 percent on stake sale reports.

Indian shares snapped a seven-week rally last week, with benchmark indexes Sensex and the Nifty falling 2 percent and 2.4 percent, respectively in the week ended February 24, as rising oil prices amid escalating tensions between the West and Iran and worries over India's widening fiscal deficit spooked sentiment.

by RTT Staff Writer

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