Sensex records sixth decline in seven sessions of 2014

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex shares fell slightly on Thursday, recording its sixth decline in seven sessions so far this year, as blue-chips such as Larsen & Toubro fell on anxiety ahead of the quarterly earnings season and inflation data.

Caution was seen ahead of the start of the corporate earnings reporting season, with Infosys announcing its results on Friday.

India is also due to post wholesale and consumer price data on Tuesday, which will help determine whether the Reserve Bank of India will resume raising interest rates after tightening monetary policy by a total of 50 basis points over September and October.

 

However, India's inflation rate will probably ease in December to 7.00 percent from the 14-month high of 7.52 percent in November helped by waning food prices, a Reuters poll of 22 economists showed.

Falls also tracked lower global shares ahead of policy meetings at the European Central Bank and Bank of England on Thursday and the U.S. jobs report due on Friday.

"We remain bullish on Indian shares. December quarter would mark the second straight quarter of recovery in earnings for India Inc," said Abhay Laijawala, managing director and head of research at Deutsche Equities India Pvt. Ltd.

The Sensex fell 0.08 percent, or 16.01 points, to end at 20,713.37, marking a total fall of 2.2 percent for 2014.

The Nifty lost 0.1 percent, or 6.25 points, to end at 6,168.35.

Among blue-chips, Larsen & Toubro fell 2.7 percent, while Housing Development Finance Corporation ended 0.3 percent lower.

Caution ahead of key inflation data next week also hit bank stocks. Axis Bank fell 2.2 percent while State Bank of India lost 1.1 percent.

Among other rate-sensitive stocks, Mahindra and Mahindra Ltd fell 1.6 percent while Maruti Suzuki India Ltd lost 1.4 percent.

Jubilant Foodworks , which operates the Domino's Pizza franchise in India, fell 3 percent after the central bank on Wednesday said aggregate net purchases of equity shares in the company by foreign institutional investors had reached the prescribed limit.

Biocon fell 2.4 percent after brokerage CLSA downgraded the stock to 'sell' from 'outperform' citing a run-up in valuations.

HCL Infosystems fell 4 percent, Aban Offshore ended 3.6 percent lower and Opto Circuits (India) lost 2.2 percent after index compiler FTSE removed them from its Global Equity Index series.

However, software stocks rose a day ahead of bellwether Infosys' October-December earnings.

Infosys gained 0.7 percent, Tata Consultancy Services Ltd rose 0.4 percent while HCL Technologies Ltd surged 3.2 percent.

Gold-based lenders also surged to their maximum daily limit after the RBI on Wednesday relaxed gold lending rules.

Muthoot Finance surged 20 percent, while Manappuram Finance jumped 19.8 percent.

(Editing by Sunil Nair)