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Indian Shares End Lackluster Session Flat

4/27/2012 7:23 AM ET

Indian shares ended yet another lackluster session on a flat note Friday, as the news of Spain's credit rating downgrade prompted investors to take a cautious stance ahead of the weekend.

While most Asian stocks fell on fresh concerns about the European debt crisis, European stocks rebounded from an early fall and the U.S. index futures were little changed ahead of U.S. GDP figures for the first-quarter and a consumer sentiment reading, helping limit the downside for Indian equities.

After moving both sides in a narrow range, the benchmark 30-share Sensex finished the session a tad higher at 17,134, up 4 points or 0.02 percent from its previous close, while the broader Nifty index ended up 2 points or 0.03 percent at 5,191. Consumer durable and IT stocks saw significant buying, while FMCG, metal and realty stocks ended on a subdued note.

ICICI Bank rose 2.3 percent as the country's largest private sector lender reported a 31 percent jump in fourth-quarter net profit, beating forecasts. Rival HDFC Bank edged up 0.2 percent and Axis Bank gained 1.6 percent ahead of its fourth-quarter results after the market close, while state-run lender SBI fell 1.6 percent.

Aluminum maker Hindalco rallied 2.2 percent, software services exporters like Infosys and TCS rose over a percent each and utility vehicles manufacturer Mahindra & Mahindra added 1.2 percent.

Market heavyweight Reliance Industries ended down half a percent after reports said that gas output from its KG-D6 fields has fallen to 33.89 standard cubic meters a day in the week ended April 1 from 34.09 mmscmd in the previous week.

Telecom major Bharti Airtel shed half a percent, metal stocks like Tata Steel, and Sterlite fell about a percent each, power-equipment major BHEL lost 1.5 percent and state-run miner Coal India ended down 2.2 percent.

Biocon jumped 4 percent as the pharmaceutical company reported a modest 3 percent decline in consolidated net profit for the fourth quarter. Hexaware Technologies rose 2 percent after reporting a strong growth momentum for the first quarter of the calender year. Indiabulls Financial Services soared 4.4 percent on heavy trading volume after reporting strong fourth-quarter results.

Idea Cellular fell 2.2 percent after the Aditya Birla Group firm reported a 13 percent decline in its fourth-quarter consolidated net profit owing to higher depreciation and interest charges on 3G investments.

Likewise, Hindustan Construction Company slumped 5.6 percent after posting weak quarterly earnings. United Spirits shed 1.2 percent on profit taking after rallying 13 percent in the past two sessions. DLF edged down 0.1 percent as Dr Reddy's will replace the company in the 30-share Sensex from June 11.

On the global front, other Asian markets swung between gains and losses before closing mostly lower on Friday, as Standard & Poor's downgrade of Spain's credit rating rekindled worries about the fragile state of the eurozone economy. A pair of mixed U.S. economic reports also revived concerns about slowing global growth.

S&P downgraded Spanish credit ratings by two notches, saying that it expects further deterioration of the country's public finances amid economic contraction and the need to support banks.

While renewed escalation in Europe's difficulties would clearly put the Asia and Pacific region's buoyant economic outlook at risk, Asian policymakers should be ready to shift gears and renew their tightening cycle as overheating pressures become evident, the International Monetary Fund said today in its Regional Economic Outlook report.

In the absence of adequate policy responses, a deeper recession in the euro zone could cut two to five percentage points off growth in Asia, it warned.

Japan's Nikkei average fell 0.4 percent, giving up early gains, after the Bank of Japan boosted its bond-buying scheme by a further 10 trillion yen to achieve its new 1 percent inflation target and support economic growth. The additional monetary easing measures were beyond market expectations, but the central bank extended the maturity of bonds it buys to three years from a two-year limit.

The major European markets were trading on a mixed note after Italy saw its borrowing costs rise by more than 0.5 percent at a key bond auction.

by RTT Staff Writer

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