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Mumbai: Indian shares pared early losses of nearly four per cent to end down 0.32 per cent yesterday, as bargain hunting after the market's biggest weekly fall in almost two years stopped the market from hitting a new low for 2008.
Top infrastructure player Larsen & Toubro lost as much as 12.5 per cent before ending down 8.7 per cent at Rs2,728.80, its weakest in nearly six months, after three brokerages said one of its units may book a loss on commodity hedging.
The stock has lost nearly 35 per cent this year.
However, L&T's chief financial officer told Reuters that losses from hedging would be compensated almost entirely by its overall margin expansion.
The benchmark BSE 30-share index fell 51.80 points to close at 15,923.72, although 16 shares gained, its lowest close since mid-September. The index has fallen by a quarter from a life high of 21,206.77 points hit on January 10.
At yesterday's low, the index was down 3.8 per cent and less than 30 points above its 2008 low of 15,332.42, set on January 22, but staged a strong recovery to briefly turn positive in late trade.
Still, traders said it was hard to be optimistic given worries of a US recession, a global credit squeeze and rising oil and commodity prices pushing up inflation.
"Everything is happening at the same time, there is bad news from the United States and back home we have inflation and offloading by foreign investors," said Neeraj Dewan, director with Quantum Securities in New Delhi.
"Market expectations of a rate cut are drying up because of the rise in inflation," he said.
Inflation hit five per cent in late February for the first time since last June, dashing hopes of a local rate cut, even though economic growth is moderating.
India's annual economic growth is expected to slow in the March quarter as the economy decelerates towards a trend rate of 8-8.5 per cent, Pronab Sen, the country's chief statistician told Reuters in an interview.
Top mobile services operator Bharti Airtel gained 6.8 per cent to Rs802.80 on short covering, traders said. "If anything, bad news just doesn't appear to stop at the moment. The next big trigger is the March 18 meeting of the Federal Reserve," brokerage India Infoline said in a client note.
A Reuters poll after weak US jobs data on Friday showed Wall Street dealers unanimously expected the Fed to cut interest rates by at least a half point.
In the broader market, 1,915 losers defeated 744 gainers on volume of nearly 371 million shares.
The 50-share NSE index rose 0.6 per cent at 4,800.40.
Parry Agro Industries rose 3.2 per cent to Rs1,887 after majority stakeholder New Ambadi Estates made an open offer to buy 15.11 per cent in the company at a floor price of Rs1,759.11, ahead of delisting the stock. Ceat rose 12 per cent to Rs140.55 after it said it had signed a deal to sell its land in suburban Mumbai for Rs1.3 billion.
Stocks
Karachi index falls
Pakistan's benchmark Karachi Stock Exchange 100 Index fell 171.89 points, or 1.1 per cent, to 14,913.29 at close. The index advanced one per cent last week.
MCB Bank dropped Rs18.75, or 4.6 per cent, to 391. The stock fell as investors judged it as over priced, said Atif Malik, research analyst at JS Global Capital, in Karachi.
Pakistan Oilfields declined Rs8.15, or 2.2 per cent, to 355.85 after a 5.1 per cent gain in the previous three sessions. It fell as investors judged last week's gains as excessive.
- Bloomberg
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