BSE Sensex ends flat, Bharti Airtel falls

mumbai  08 08, 2012, 17:40 IST

 

The BSE Sensex gave up early gains to end flat on Wednesday after European shares fell on renewed concerns about the euro zone, with domestic telecom carrier Bharti Airtel falling to its lowest in two years as it missed profit forecast.

Expectations for weak industrial output data for June, scheduled for release on Thursday, made buyers cautious and prevented them from big bets.

Domestic stocks gained 2.35 percent in the last two sessions after comments on Monday from newly-appointed Finance Minister P. Chidambaram boosted investor appetite.

The lack of meaningful policy action could further dent demand for global risk assets at a time when investors in India are jittery over poor rainfalls during the crucial monsoon season.

"Past few days are driven by liquidity, and it is still unabated based on expectation that the finance Minister will dole out some policy," said Ambareesh Baliga, COO of Way2Wealth Brokers Pvt Ltd.

"Personally I doubt how much he can do given the current economic scenario. Instead of buying more, one should be booking profits if market moves further from here on liquidity," he said.

The 30-share BSE index was flat at 17,600.56 points while the 50-share NSE index gained 0.02 percent to end at 5,338.00 points.

Meanwhile, more economists slashed their economic forecasts for India, with Citigroup and CLSA cutting their outlooks for growth to 5.4 percent and 5.5 percent respectively in the fiscal year ending March, with a weak monsoon adding to economic headwinds.

Citigroup said a policy gridlock, recent power outages, weaker exports and falling domestic consumption will take a toll on Asia's third-largest economy.

Chidambaram said on Monday he would shortly unveil a path of fiscal consolidation, and promised the government would announce measures to clarify tax laws and tackle investments into mutual funds.

India's top telecom carrier Bharti Airtel posted its 10th straight quarter of profit decline as cut-throat competition squeezed margins.

IDFC said Bharti Airtel's headline numbers are weak at first impression, with domestic volume growth of just 3.9 percent while pricing fell 2.6 percent, sequentially.

Shares in Bharti Airtel ended 6.62 percent lower.

Among gainers, Mahindra & Mahindra , rose 3.7 percent, after it beat street estimates with a 20 percent rise in first-quarter net profit, as strong demand for its sporty cars offset sluggish sales at its key tractor business.

Reliance Industries shares gained 1 percent on hopes that the regulatory overhang is cooling off after a panel of officials, including those from the upstream regulator, on Tuesday declared three gas discoveries in Reliance Industries KG D6 block as commercial, and cleared Reliance's budgeted expenditure on key gas fields from the D6 block for the three fiscal years 2010/11, 2011/12, and 2012/13 -- a long-pending demand of the company.

Deutsche Bank said cement stocks are in for a potential re-rating, citing the pickup in merger and acquisitions in the sector.

The brokerages said any enterprise value greater than $150 per tonne for the CRH and Jaiprakash Associates transaction could trigger a re-rating for a number of midcap stocks.

Ambuja Cements rose 0.9 percent, while Jaiprakash Associates fell 0.84 percent.

Earlier in the day, a report dated August 1 from Veritas Investment Research, recommending a 'sell' on all stocks in the Indiabulls Group, circulated widely within the Indian financial community.

Indiabulls Real Estate fell 2.34 percent while Indiabulls Financial Services fell 0.85 percent and Indiabulls Power Ltd lost 3.7 percent. Indiabulls Securities ended down 3.7 percent.

Tata Motors rose 1.13 percent ahead of earnings on Thursday, after adding 8.1 percent in the last two trading sessions.

(Editing by Jijo Jacob)