Reuters

 Indian shares fell yesterday, with blue chips such as ITC Ltd retreating, as traders refrained from building positions ahead of an extended holiday period, while foreign investor sales also weighed on sentiment.

Markets will be shut from today until Monday for public holidays and re-open for trading on Tuesday.

Investors thus opted for caution, given lingering global risk factors such as the continued civil unrest in Hong Kong and rising worries about earlier-than-expected US rate hikes.

Adding to the caution, overseas investors sold stocks worth of Rs4.86bn ($78.7mn) on Tuesday, offloading shares in five out of past six sessions.

Foreign investors have been integral to Indian shares marking record highs on September 8 and any signs of selling tends to spark concerns. July-September earnings reports would also be key for near-term direction. Infosys Ltd kicks off the earnings season with quarterly results on October 10.

“In the near term, geo-political tensions, economic growth in China and eurozone will take most of the attention of the market. Quarterly results will start pouring in a couple of weeks and will impact individual stocks,” said Dipen Shah, head of private client group research at Kotak Securities.

The benchmark BSE index fell 0.23%, or 62.52 points, to end at 26,567.99, also falling 0.22% for the week.

The broader NSE index lost 0.24%, or 19.25 points, to end at 7,945.55, while marking a weekly decline of 0.29%.

Blue-chips led the declines. ITC fell 1.7%, while Reliance Industries ended 2% lower.

HDFC Bank fell 0.5% and Indusind Bank lost 3.2%.Non-banking financial companies (NBFCs) fell on worries the central bank may tighten norms for bad loans. The Reserve Bank of India on Tuesday said changes in the NBFC regulatory framework would be introduced by end of this month.

Shriram Transport Finance Co fell 2.4% and Mahindra and Mahindra Financial Services ended down 0.6%.

Maruti Suzuki India, India’s largest carmaker by sales, fell 3% after its exports fell by 28.2% in September, surprising some investors.

However, two-wheeler maker Hero MotoCorp gained 1.3% after its September sales rose by 30%, beating some analysts’ estimates.

Consumer discretionary shares were top gainers among BSE large-cap stocks. Traders said consumer good companies are seen as safer bets given the expected rise in disposable incomes.

Berger Paints India ended up 5.5%, Bata India rose 5.1% and pizza maker Jubilant Foodworks surged 3.9%.

Also, software exporters gained on hopes weakness in currencies against US dollar would aid margins from overseas.

Tata Consultancy Services gained 1.4%, while Infosys ended up 2.7%.

 

Rupee rebounds from 7-month low

The rupee rose yesterday, rebounding from a seven-month low touched earlier in the session as investors saw recent losses as overdone, even as caution prevailed ahead of an extended holiday.

The rupee opened weaker at 61.95, a level last seen on March 4, but steadily regained some ground. The unit fell in both the previous sessions, dragged down by a global rally in the dollar due to worries about earlier-than-expected US rate hikes.

Still, the rupee fell 0.75% for the week, its biggest loss since the trading week ended on August 1, which was also marked by gains in the dollar. It was also the rupee’s fourth consecutive weekly fall.

Markets will be shut from Thursday to Monday and re-open on Tuesday at a time of caution in emerging markets, with the civil unrest in Hong Kong also weighing on sentiment. “It’s more of a dollar-strong story than a rupee-weak one,” said Harihar Krishnamoorthy, treasurer at First Rand Bank in Mumbai.

“Having said that, it is clear that as the rupee approaches the 62 level, we are seeing increased dollar selling from traders. The rupee has lost much less than its emerging market peers in recent sessions.”

The partially convertible rupee ended at 61.61/62 per dollar compared with Tuesday’s close of 61.7450/7550.

Besides global factors, traders said the rupee could be impacted by the start of corporate earnings late next week, which could lead to volatility in share markets.

In the offshore non-deliverable forwards, the one-month contract was at 61.99/62.09, while the three-month was at 62.60/70.

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