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Indian Shares Erase Early Gains

Indian shares ended modestly lower on Wednesday, erasing early gains, as investors waited for the government's clarification on GAAR before deciding on the future course of action. Weak PMI and infrastructure output data and growing weakness in the rupee, which fell below 53 to touch a near 4-month low against the dollar today, also weighed on investor sentiment.

Notwithstanding positive global cues, the benchmark 30-share Sensex finished the session down about 17 points or 0.1 percent, while the broader Nifty index fell by 9 points or 0.17 percent to 5,239. Automakers paced the declines following mixed April sales numbers, while consumer durable, IT, banking and FMCG stocks gained ground.

Tata Motors, India's largest automaker, tumbled 3.8 percent as it reported a 7 percent decline in its total sales including exports in April. Carmaker Maruti Suzuki lost 2.8 percent on reporting a modest 3.4 percent rise in April vehicle sales. Bajaj Auto fell 1.9 percent after the two and three-wheeler major reported a modest 4 percent rise in its monthly sales.

However, Mahindra & Mahindra rose 0.7 percent on the back of strong April sales and Hero MotoCorp ended up half a percent ahead of its Q4 earnings.

Bharti Airtel rose 2.5 percent even as the telecom major posted a 28 percent decline in its fourth-quarter consolidated profit on account of higher taxes and forex losses. Hindustan Unilever rose 2.1 percent on posting forecast-beating Q4 earnings. Property developer DLF gained 2.7 percent, extending gains for the third straight session following a brokerage upgrade.

In second-line stocks, Hathway Cable soared 19.2 percent, Den Networks rose 2.1 percent and WWIL jumped 4.7 percent after the Telecom Regulatory Authority of India allowed multi-system operators to charge a carriage fee from broadcasters.

Subex hit the 10 percent circuit limit after receiving RBI approval for restructuring its outstanding foreign currency convertible bonds, involving a combination of debt and equity. BGR Energy rose 1.5 percent on winning a Rs 1,855-crore order from Meja Urja Nigam Pvt for the supply of super-critical boilers.

Kingfisher Airlines fell 1.6 percent after reports said a section of its staff is mulling the option of moving the Labor Court to expedite settlement of their dues.

On the global front, Asian shares rose across the board, as surveys pointing to signs of growth in American and Chinese manufacturing soothed recent worries about the global economic outlook. China's Shanghai Composite index rallied 1.8 percent to end at its highest level in seven weeks, led by brokerages after the China Securities Regulatory Commission said it would reduce transactions fees for yuan-denominated shares by 25 percent starting June 1.

Meanwhile, a survey of purchasing managers by HSBC showed China's manufacturing contracted for a sixth month in April, but the pace of deterioration in manufacturing activity had slowed following a difficult first quarter.

European stocks were higher in afternoon trading, with sentiment in the region influenced by some earnings news and broker recommendations amid S&P upgrading Greece's debt rating.

by RTTNews Staff Writer

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