Sensex falls; Idea posts biggest slump in five years

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex fell on Monday, snapping a four-session winning streak, as wireless operators such as Idea Cellular slumped after rising prices in a mobile spectrum auction set off concerns about profit margins.

Blue chips were also hit after foreign investors sold a net $39.88 million worth of shares in the secondary market on Friday, extending their selling streak to a seventh day that brought the total outflows to $582.02 million.

Still, gains in defensive sectors such as pharma prevented a sharper fall, as caution was also seen ahead of consumer price inflation and industrial output data due on Wednesday and wholesale inflation data on Friday.

 

The CPI for January is seen at 9.3 percent versus mean estimates of 9.4 percent, Thomson Reuters smart estimates show.

Globally, shares made guarded gains, encouraged that Wall Street was able to weather a seemingly disappointing U.S. jobs report, although caution also prevails ahead of Federal Reserve Chairwoman Janet Yellen's first testimony to the U.S. House of Representatives on Tuesday.

"Shares may continue to remain rangebound. Inflation data may lead to a breakout or breakdown before the elections," said G Chokkalingam, founder of research and fund advisory company Equinomics.

The Sensex fell 0.21 percent, or 42.29 points, to 20,334.27, after ending on Friday at its highest in one week.

The Nifty dropped 0.16 percent, or 9.75 points, to 6,053.45.

Shares of telecom companies slumped as rising prices in the spectrum auction are seen reducing potential profit margins.

Idea Cellular slumped 8.44 percent, its biggest single-day fall since October 23, 2008. Bharti Airtel fell 2.7 percent, while Reliance Communications lost 4.2 percent.

Among blue chips, Housing Development Finance Corp fell 2.3 percent, while Tata Consultancy Services ended lower 2.4 percent on continued risk aversion.

Banks were also under pressure with HDFC Bank lower 0.6 percent and State Bank of India down 0.9 percent.

However, pharmaceutical companies perceived as defensive gained on risk aversion.

Sun Pharmaceutical Industries gained 1.7 percent and Dr.Reddy's Laboratories rose 1.5 percent.

DLF rose 2.9 percent after the company said it completed the sale of its Amanresorts luxury hotel chain back to original Indonesian owner Adrian Zecha for an enterprise value of around $358 million.

(Editing by Subhranshu Sahu)