Markets start Samvat 2069 on a sombre note

Financials, IT shares lead decline

Markets ended the customary 'Muhurat' trading session held to usher in the new year Samvat 2069 on a sombre note, amid weak global cues, with software and financials leading the decline. The Samvat year is based on the lunar calendar on ancient Hindu tradition.

The 30-share Sensex ended down 51 points at 18,619 and the 50-share Nifty ended down 17 points at 5,667.

Asian shares ended sharply lower on Tuesday as investors exercised caution in wake of rising worries about the impact of fiscal challenges in the US and debt crisis in the Euro zone. The Shanghai Composite ended down 1.5%, the Hang Seng dropped 1.1% and the Taiwan Weighted slumped 1.8%. Japan's Nikkei ended down for the seventh straight day. The   benchmark index ended down 0.2% at 8,661.

European shares were also trading lower on Tuesday after the group of finance ministers in the euro zone which met on Monday offered Greece more time to reduce its debt burden and also postponed their decision to grant further aid to the debt riddled nation. Meanwhile, United Kingdom's benchmark share index FTSE-100 was down 0.7%  weighed down by selling pressure in global telecom major Vodafone Group Plc after the company reported a loss of nearly 2 billion pounds during the first six months of calendar 2012. Among others the DAX lost 0.7% and the CAC-40 was down 0.6%.   

“We could see during the bull market over the next six months the mid- and small-caps outperforming. And, as the economy recovers and the earnings improve, the valuations gap between the mid-cap and large-cap will ease, too, leading to higher gains,” says Saurabh Mukherjea, Head of Equities, Ambit Capital.

Among the sectoral indices on the BSE, IT, Bankex, COnsumer Durables, Realty and Auto were the top losers down 0.3-0.7% each.

In the Sensex pack, HDFC ended down 1.3%, HDFC Bank eased 0.6% and SBI ended lower 0.9%. Financials ended lower after double digit consumer price inflation dashed hopes of a rate cut by the central bank.

Among software shares, Infosys ended down 0.9% and TCS slipped 0.7%.

Among other shares, DLF ended down 1.7% at Rs 203 on the Bombay Stock Exchange after reporting 63% year-on-year (yoy) decline in its consolidated net profit at Rs 139 crore for the quarter ended September due to decline in sales.Total income from operations of the country’s largest realty company has dropped 19% during the quarter to Rs 2,039 crore, compared to Rs 2,532 crore last year in the same period, DLF said in a statement.

L&T Finance Holdings has surged 16% to end at Rs 83 after announcing fund raising plans of up to Rs 325 crore through issue of debentures on private placement basis. “The company intends to issue unsecured, redeemable, non-convertible debentures aggregating to Rs 325 crore, on private placement basis,” L&T Finance Holdings, a financial arm of Larsen and Toubro said in a filing.

United Breweries has rallied 16% to end at Rs 875 on back of large jump in trading volumes in the counter. On Friday, Vijay Mallya's other group companies United Spirits and United Breweries (Holdings) had signed agreements with Britan’s Diageo Plc, under which Diageo would acquire a 27.4% stake in United Spirits.

Diageo Plc has also made an open offer to acquire additional 26% shares held by the public at price of Rs 1,440 per share. Post an open offer for 26%, Diageo will own 53.4% in United Spirits that will involve a total payout of Rs 11,167 crore.

VA Tech Wabag has soared 6.4% to end at Rs 545, extending its previous day’s 8% rally, after the company said that its consortium has bagged a major desalination contract In Oman

“The company in association with Cadagua (Spain) and Galfar (Oman) bagged a 192 MLD SWRO Desalination project in Al Gubrah, Muscat, Sultanate of Oman on a BOT (build-own operate) basis,” VA Tech Wabag said in a statement.

However, the broader markets ended higher. The BSE Mid-cap gained 0.7% and the Small-cap index ended 1.2% higher.

Market breadth on the BSE ended strong on the back of broad-based buying with 1,877 gainers and 799 losers.