Indian bourses log drop on first day of new year

Indian bystanders watch the share prices on the digital broadcast on the facade of the Bombay Stock Exchange. The benchmark Sensex gave up initial gains in a lacklustre session yesterday following the absence of global triggers and ended with a 30-point loss.

Bloomberg, Agencies

Mumbai

The benchmark Sensex gave up initial gains in a lacklustre session yesterday following the absence of global triggers and ended with a 30-point loss, logging a drop on the opening trading day of the year for the first time since 2006.

Most Indian stocks rose, led by property companies, after a Reserve Bank of India adviser said the monetary authority will avoid further interest-rate increases if inflation slows.

Godrej Properties jumped 9.1% as the S&P BSE India Realty Index climbed to a five-month high.

Bank of Baroda advanced for a second day. Coal India, the world’s largest producer of the fuel, added 0.8% after Morgan Stanley bought shares. Bharti Airtel climbed to a five-week high.

About two stocks rose for each one that fell on the S&P BSE 100 Index at the close in Mumbai.

The benchmark S&P BSE Sensex slipped 0.1% after advancing 9% in 2013. The RBI will avoid increases in the benchmark interest rate if data shows inflation fell in December, and policy makers may even have room for a reduction, Ashima Goyal, a member of the central bank’s technical advisory committee, said by phone on Tuesday.

“Markets are taking the RBI comments as a signal that interest rates may start trending down soon,” Kishor Ostwal, managing director at CNI Research, said in a phone interview yesterday from Mumbai. “Anticipation of lower policy rates is helping property stocks and lenders.”

RBI Governor Raghuram Rajan surprised economists last month by holding the benchmark rate at 7.75% instead of adding to increases totaling 50 basis points since taking over the central bank in September.

Saudi Arabia’s Tadawul All Share Index gained 0.6% at 2:02 pm in Riyadh after climbing 26% in 2013, the measure’s biggest increase in four years.

Oman’s MSM 30 Index rose 0.6%, while the TA-25 Index in Israel added 0.2%. Pakistan’s KSE 100 Index climbed 1.4% to a record.

India’s CNX Nifty Index fell less than 0.1% to 6,301.65 amid trading volumes 58% below the 30-day average, according to data compiled by Bloomberg. The S&P BSE 100 Index added less than 0.1% to 6,328.21 and the Sensex was at 21,140.48.

The benchmark gauge posted the biggest increase among equity indexes for the four largest emerging markets in local- currency terms last year as a weak rupee bolstered export earnings, the biggest monsoon rains in six years supported rural incomes and investors speculated national elections will usher in a more stable government in 2014.

Godrej Properties surged the most since 2010. DB Realty soared 17%, Indiabulls Real Estate jumped 5.7% while Housing Development & Infrastructure gained 3.9%. The S&P BSE India Realty Index advanced 2.9% to the highest level since July 18.

Bank of Baroda increased 1.8%. Yes Bank added 1.2%. The S&P BSE Bankex Index rose for a second day.

Coal India advanced to Rs292.20. Morgan Stanley bought 16.7mn shares of the company, according to the National Stock Exchange of India’s website. Bharti Airtel rose 2.3% to the highest level since November 21.