Stocks dip, volumes fall [Times of Oman]

(Times of Oman Via Acquire Media NewsEdge) Mumbai:Indian stocks fell for the fourth week. Consumer companies and lenders led the decline.

The S&P BSE Sensitive index, or Sensex, dropped less than 0.1 per cent to 19,317.01 at the close, with volumes 3 per cent below the 30-day average.

The gauge lost 0.8 per cent this week, the longest stretch since the period ended on May 18. ITC, the country's largest cigarette maker, slid 1.6 per cent. Mortgage lender HDFC fell 1.9 per cent after Goldman Sachs cut its recommendation on the stock.

Finance minister Palaniappan Chidambaram, who presents the federal budget next week, faces pressure to curb spending after vowing to pare India's budget deficit to 4.8 percent of gross domestic product in the year ending March 2014, from a goal of 5.3 per cent this fiscal year.

The economy will grow 5 per cent this year, the least since the 4 per cent increase in the 2002 to 2003 period, the statistics office said on February 7. Data last week showed factory output fell for a second month in December.

"The market is delicately poised before next week's big event," Jitendra Panda, head of broking at Capital First, said in a phone interview yesterday.

"It will be a deficit budget, which may raise taxes and revenue. If subsidies rise, it will pressure inflation and limit the scope for more interest-rate cuts this year. Rate-sensitive stocks such as banks are under pressure due to that concern." The Sensex has fallen 3.9 per cent from a two-year high set on January 25 as net incomes at the biggest companies disappointed investors. Earnings at 43 per cent of the 30 index firms trailed estimates in the three months ended December, compared with 40 per cent in the previous two quarters, data shows.

ITC fell 1.6 per cent to Rs292. Hindustan Unilever, India's biggest household products maker, tumbled 2.7 per cent to Rs455.

HDFC dropped 1.9 per cent to Rs799, the steepest drop since January 11. Goldman Sachs cut the stock to sell from neutral and lowered the price estimate by 6.3 per cent to Rs740 citing increasing competition. HDFC Bank, the top lender by value, lost 1 per cent to Rs659.

Tata Motors, the owner of Jaguar & Land Rover, slid 1.6 per cent to 293, the lowest level since February 21.

Bharti Airtel, India's biggest mobile services company, surged 4.5 per cent to Rs309, the most since January 15, after the New Delhi High Court reserved an order on renewal of licenses held by the company and Vodafone.

Overseas funds bought a net $212 million of Indian stocks yesterday, after the first net outflow this year on February 19, taking this year's net purchases to $8.2 billion, a record for the period, data shows. Warning sign Foreign buying during the past 12 months as percentage of India's stock market value has crossed 2 per cent, a 'warning sign' historically for future returns, Morgan Stanley said in a report dated February 20. Credit Suisse said that Indian equities were the 'most overbought' by foreigners, at 1.7 per cent of the market capitalisation.

The Sensex has retreated 0.6 per cent this year, the worst- performing benchmark gauge in Asia after Malaysia. The index rose 26 per cent in 2012, its biggest annual gain since 2009, as the government took measures to revive the economy.

The CNX Nifty Index of the National Stock Exchange of India Ltd. declined less than 0.1 per cent to 5,850.30. India VIX, which measures the cost of protection against declines in the Nifty, fell 0.9 per cent to 16.79.

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