Indian shares fell notably on Friday, weighed down by political uncertainty and weak global cues. The rupee was firm against the dollar despite a weaker euro and investors continue to bet that some reforms will come forth post the Presidential election results expected on July 22, helping limit the downside to some extent.
Prime Minister Manmohan Singh today reached out to sulking NCP chief Sharad Pawar, saying he is a "very valued colleague" and that his knowledge, wisdom and experience are a "great asset" to his government. Pawar and his close associate Praful Patel reportedly resigned from the Union Cabinet on Thursday for not being given due credit for their work and seniority.
With former Finance Minister Pranab Mukherjee about to move into Rashtrapati Bhavan soon, Pawar has demanded the No. 2 position in the Cabinet which has apparently been given to Defense Minister AK Antony, reports said.
The inflation outlook also remains uncertain as the worst drought in more than 50 years in the U.S. stoked inflation concerns, especially in India and China.
The benchmark 30-share Sensex ended the session down about 120 points or 0.7 percent at 17,158, with 24 of its components retreating. The broader Nifty index fell by 38 points or 0.72 percent to 5,205, while the BSE mid-cap and small-cap indexes outperformed, falling 0.2 percent and 0.1 percent, respectively.
Among those which bucked the downward trend, Bajaj Auto rose 2.7 percent after reporting flat profit for the first quarter with better-than-expected profit margins. Maruti Suzuki gained 2.4 percent on resuming car dispatches at its Manesar plant, while TCS ended 1.9 percent higher.
Among those that fell, Dr Reddy's Laboratories lost 2.7 percent on reporting weaker-than-expected Q1 results. BHEL & Larsen & Toubro fell 2.5 percent and 1.2 percent, respectively, after the Union Cabinet cleared a new duty structure for importing power equipment. HDFC Bank, SBI, Infosys, Tata Power, HDFC, Wipro, ICICI Bank and Cipla all ended down over a percent each.
Sugar stocks ended on a subdued note after the cabinet committee on economic affairs approved a 17 percent hike in the statutory minimum price for sugarcane. Balrampur Chini edged down marginally, Bajaj Hindusthan declined 1.2 percent, Dhampur Sugar eased 0.3 percent and Shree Renuka fell 1.8 percent.
Indiabulls Financial Services plunged 4.7 percent after announcing Q1 results. IOB declined half a percent after the state-run lender said it would require Rs.1,500 crore capital infusion in the current fiscal year.
Reliance Industries fell 0.7 percent ahead of its quarterly numbers. Telecom stocks ended mixed ahead of a ministerial meeting to decide on the issue of 2G spectrum pricing. Bharti Airtel eased 0.9 percent and Reliance Communication slid 0.3 percent, while Idea Cellular rose 1.6 percent.
Tata Communications rallied 5.8 percent after the Cabinet cleared the company's proposal to sell surplus VSNL land.
On the global front, other Asian markets ended mostly lower as weak economic data on U.S. weekly jobless claims, existing home sales and regional manufacturing raised concerns over the health of the world's largest economy.
State media reports that Beijing has asked its local governments to maintain a firm grip on the real estate market to prevent property prices from rebounding also dampened investor sentiment.
European stocks were narrowly mixed in early trading as a sharp rise in Spain's borrowing costs brought the focus back to sovereign debt problems in the peripheral countries.
by RTT Staff Writer
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