Indian shares fell notably on Thursday, mirroring weak cues from Asia and Europe as disappointing economic data from China, Japan and Europe stoked worries that the global slowdown could be more severe than meets the eye. Trinamool Congress's pull-out threat from UPA also weighed on the markets, but investors are pinning hopes that the issue will not trigger fall of the much-maligned Manmohan Singh government.
The benchmark 30-share Sensex ended the session down 147 points or 0.79 percent at 18,349, while the broader Nifty index fell by 46 points or 0.82 percent to 5,554. Metal, capital goods, power, oil/gas and banking stocks led the decliners, while IT and FMCG stocks gained ground, limiting further downside in the broader market.
On a day when the National Democratic Alliance and other opposition parties called for nation-wide bandh to protest against diesel price hike and FDI in multi-brand retail, Finance Minister P Chidambaram said the UPA government had enough friends and it will continue working for the greater good of the economy. This assertion by the government that the reforms are here to stay probably helped to limit the downside for the markets.
Elsewhere, other Asian markets fell broadly, with Chinese shares tumbling over 2 percent and Japanese Nikkei average falling 1.6 percent, as mixed U.S. housing data, continued contraction in China's factory sector and a fall in Japan's exports for a third consecutive month in the year to August stoked global growth worries. Energy firms retreated across the region after crude prices hit a six-week low in New York trading yesterday, weighed down by comments from Saudi officials and on fears of oversupply in the market.
Major European averages were also in negative territory after preliminary data showed manufacturing activity in the euro zone remained in contraction territory for the 13th consecutive month. The report also showed that activity in the region's service sector deteriorated to the lowest level since July 2009 in September.
Back home, state-run companies BHEL, Gail India and Coal India led the decliners in the Sensex pack, falling 3-4 percent, while HDFC, Larsen & Toubro, ICICI Bank, Reliance Industries, Tata Steel and Sterlite lost 2-3 percent. Energy giant Reliance Industries fell 2.7 percent on profit taking following steep gains in the past five trading sessions.
Retail and aviation stocks were among the worst hit following recent steep gains. Pantaloon Retail tumbled 3.5 percent, Kingfisher plunged 7.2 percent and SpiceJet fell 3.4 percent.
Among the prominent gainers, software services exporter TCS rose 1.6 percent on saying it sees strong demand despite weakness in macroeconomic environment. Wipro added 0.9 percent and Infosys closed up 0.6 percent.
Bajaj Auto rallied 2.3 percent amid reports that the two-wheeler manufacturer plans to enter into a marketing deal with Kawasaki for selling its motorcycles in Indonesia. Shares of car maker Maruti Suzuki ended up 0.6 percent.
Shares of ONGC rose 1.2 percent and oil retailers BPCL and HPCL climbed about 3 percent each after Brent crude futures fell below $108 a barrel in Asian trading Thursday, weighed down by data showing a surge in inventories and weak economic data.
Shares of consumer durable companies ended mostly lower despite reports that the government may approve seven percent hike in Dearness Allowance to central government employees and pensioners later this week.
Sugar shares ended mixed amid reports the government is mulling a hike in sugar prices sold through public distribution system. Bajaj Hindusthan and Shree Renuka Sugars rose about a percent, but Balrampur Chini fell 2 percent.
by RTT Staff Writer
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