Indian shares snapped a five-day winning streak on Monday, as caution set in ahead of industrial output data due out tomorrow and May inflation numbers scheduled on 14th.
A rally in crude prices boosted by data showing robust Chinese crude imports in May and the rupee's weakness against the dollar following Standard & Poor's warning that India could become the first of the so-called BRIC countries to lose its investment-grade rating also led investors to book some profits late in the session. Positive global cues helped limit the downside to some extent.
The benchmark 30-share Sensex rose to a high of 16,894 early in the session before reversing direction to end down 51 points or 0.3 percent at 16,668, with 18 of its components retreating. Capital goods, healthcare, realty, oil/gas, auto and banking shares paced the declines, while consumer durable and FMCG stocks witnessed stock-specific buying on hopes of a good monsoon this year.
The broader Nifty index eased 14 points or 0.28 percent to 5,054 and the BSE mid-cap index shed 0.2 percent, while the small-cap index gained 0.2 percent.
Automakers Tata Motors, Maruti Suzuki and Mahindra all fell more than a percent after industry body SIAM said that car sales in India grew at the slowest pace in seven months during May. Two-wheeler manufacturer Hero MotoCorp lost 1.4 percent, while rival Bajaj Auto rose 1.9 percent. Lender ICICI Bank lost about half a percent, realtor DLF declined 1.6 percent and energy giant Reliance Industries fell over a percent, erasing early gains.
Among the prominent decliners in the Sensex pack, ONGC, Dr Reddy's Laboratories, Jindal Steel, Larsen & Toubro, BHEL and Cipla fell 1-2 percent. Software services major HCL Technologies fell 2.7 percent after its vice-chairman and CEO Vineet Nayar said he has sold off his entire stake in the firm.
Reliance Capital fell 1.9 percent after it reportedly received RBI approval to sell stake in its mutual fund business unit to Japan's Nippon Life.
Power producing majors like Adani Power and Tata Power rose over 2 percent each on reports that there is a room for tariff hike by up to Re.1 per unit to accommodate the increase in fuel costs due to additional taxes or change in coal pricing by Indonesia.
BPCL and Videocon Industries rose 1-3 percent, reacting to news of a significant gas find in offshore Mozambique. Suzlon Energy gained 1.1 percent on reports that it is in talks to raise up to $300 million worth refinance loan for FCCB repayment.
Ashok Leyland ended up 1.1 percent after reporting sale of buses worth $7.6 million to Ghana. Shanthi Gears advanced 2 percent on stake sale buzz, although the company clarified that the news report is not based on any information from the company.
DTH companies gained ground after information and broadcasting minister Ambika Soni ruled out extending the June 30 deadline for digitization of cable services in metro cities. Den Networks jumped 3.6 percent and Wire and Wireless added 1.3 percent.
On the global front, stocks rose sharply across Asia and Europe, as news that Spain has agreed to accept a bailout for its cash-starved banks and better-than-expected Chinese trade data released this weekend improved appetite for risk. Commodities rallied and the euro rose against the dollar and yen on expectations the Spanish bailout will lessen the risk of contagion from the region's debt crisis.
by RTT Staff Writer
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