Thursday May 29, 12:38 PM
Indian shares choppy; Tata Motors falls sharply |
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BANGALORE (Reuters) - Indian shares flipped between losses and gains on Thursday, supported by covering of expiring derivative positions and gains in Asian markets but buffeted by unabated worries about rising inflation and high oil prices.
Tata Motors fell as much as 6.9 percent to 591.10 rupees, its lowest in more than four months, in morning trade. The vehicle maker said on Wednesday it would raise up to $1.7 billion through rights issues to help fund its purchase of Jaguar and Land Rover brands.
MF Global said in a report the equity dilution arising out of Tata Motor's plans was a major concern, and in the near to medium term the stock would be under pressure due to a poor domestic demand and profit outlook.
At 11:05 a.m., the benchmark 30-share BSE index was up 0.15 percent, or 24.03 points, at 16,549.40, with 18 components gaining. It opened 0.85 percent higher and fell as much as 0.19 percent.
The index is down more than 18 percent in 2008, and has shed nearly 22 percent since touching a record high in January.
"The volatility in the market is mainly due to the expiry of futures contracts today. Investors are also adopting a cautious approach a day ahead of the release of the inflation and economic growth numbers," said Dipak Acharya at BoB Asset Management Co.
"There is no positive trigger in sight in the near term, and therefore the markets are likely to remain lacklustre."
India's inflation rate is running at 3-½ year highs at around 8 percent. Analysts say a possible rise in retail fuel prices being considered by the government could push inflation closer to double digits.
Economic growth is forecast to have slowed in the Jan-March quarter to an annual 8.2 percent from 8.4 percent in the prior three months as tighter monetary policy hit consumer spending, data is expected to show on Friday.
Kotak Securities said in a report if the market failed to trade above 16,500 in the near term, then selling of pending long positions could push the index to 16,200.
Shares in Tata Steel were up 1.7 percent at 918.10 rupees. India Infoline recommended it as a short-term buy with a target of 950 rupees after its Corus unit raised some prices.
Sun Pharmaceuticals Industries fell 3.5 percent to 1,411 rupees after Israeli drug maker Taro Industries ended a merger agreement on Wednesday.
In the broader market, 1,349 gainers were ahead of 780 losers on volume of 85 million shares.
The broader 50-share NSE index was up 0.21 percent at 4,928.70.
Elsewhere in the region, Karachi's 100-share index was down 4.4 percent at 11,721.74, extending its losses to 22.5 percent this month on political uncertainty and worries about a heavier tax burden on share trading.
Colombo's All-share index edged down 0.19 percent at 2,516.07 points.
STOCKS ON THE MOVE
* IFCI Ltd was up 10 percent at 64.35 rupees after the company said its board would meet on Thursday to consider issues related to the induction of a strategic investor and optionally convertible debentures held by government.
* Piramal Life Sciences Ltd, the research entity spun off from drug maker Nicholas Piramal India Ltd listed at 376.60 rupees. Shares in the firm hit high of 519.80 rupees, a low of 100 rupees and were later trading at 421 rupees.
MAIN TOP 3 BY VOLUME
* IFCI Ltd on 23 million shares
* Chambal Fertilisers & Chemicals Ltd on 12 million shares
* Nagarjuna Fertilisers & Chemicals Ltd on 10 million shares.
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