Indian shares edged lower on Friday, with lingering concerns over slowing domestic growth and disappointing U.S. economic data weighing on sentiment. Major Asian markets are declining, albeit posting modest losses after surveys showed China's manufacturing weakened in May. However, China's Shanghai Composite index is rising 0.4 percent on hopes for more stimulus measures.
Closer home, the government has announced a series of austerity measures, including a 10 percent cut in non-plan expenditure for 2012/13, in a bid to rein in the nation's widening fiscal deficit. Separately, the Reserve Bank of India in its draft report favored increasing the foreign institutional investment limit in the government securities, and also doing away with withholding tax.
The benchmark 30-share Sensex is currently at 16,161, down 58 points or 0.36 percent from its previous close, while the broader Nifty index is down 16 points or 0.33 percent at 4,908. The BSE mid-cap and small-cap indexes are up modestly and the market breadth remains slightly positive, with gaining shares outpacing declining ones by 857 to 750 shares on the BSE.
IT stocks are coming under pressure as the rupee rebounded to rise above 56 to the dollar in early trading today despite continued weakness in the euro. TCS, India's largest software services provider, is declining 1.5 percent, Infosys is down 0.9 percent and Wipro is losing 1.7 percent.
Property developer DLF is retreating half a percent on reports that it plans to reduce debt by selling non-core assets. BEML is tumbling 3.5 percent as it posted a Rs.14-crore net loss in the fourth quarter against a net profit of Rs.70 crore in the corresponding period last year.
Banking stocks are edging higher on expectations that the RBI may cut key policy rates to support faltering growth in the world's second fastest growing economy. SBI, Axis Bank and ICICI Bank are moving up over a percent each.
Reliance Power is up 0.7 percent after it entered into an agreement with Anglo-Dutch energy major Shell to set up a liquefied natural gas terminal in Andhra Pradesh. Mphasis is down 0.9 percent, while McNally Bharat is gaining a percent ahead of their earnings results today.
Aviation stocks such as Jet Airways, SpiceJet and Kingfisher are rallying 3-7 percent after oil companies reportedly cut aviation turbine fuel prices by 2 percent. Automakers and cement companies are trading mixed ahead of announcement of May sales numbers.
by RTT Staff Writer
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