Stocks decline on weak global cues

Sensex sheds 84 points, Nifty loses 23 points due to profit-booking

Share prices ended lower on Friday on profit-booking amid weak global cues. The BSE Sensex declined 84 points to close at 17,102 while the NSE Nifty closed 23 points lower at 5,109.

Earlier, Asia’s key benchmark indices in Singapore, Hong Kong and Taiwan fell by 0.25%-0.59%, whereas the indices in China, Indonesia, Japan and South Korea rose by 0.45%-1.61%. 

In the US market on Thursday, the Dow Jones Industrial Average closed 87 points lower while the Nasdaq Composite and the S&P 500 declined 12 points and 9 points, respectively, on concerns about the implication of Bank of America selling over $19 billion worth of common equivalent securities. The market was also bogged down by weakness in the services sector. According to the Institute for Supply Management’s reading, the services index came in at 47.1, indicating a degree of contraction.

In the Indian market on Friday, index-heavyweight Reliance Industries (RIL) was down 1%. Towards the end of trading hours, there were reports that Reliance Exploration and Production DMCC (REP), a wholly-owned subsidiary of Reliance Industries, and Ecopetrol SA have signed farm-out agreements, effective from 23 November 2009, for Borojo North Block 42 and Borojo South Block 43 in Colombia, subject to approval by the Colombian national upstream regulator ANH. As per the agreements, Ecopetrol will acquire a 20% stake in the blocks while REP will retain the balance stake and operatorship of these blocks. The two deepwater blocks cover an area of around 8,000 sqkm in water depths ranging from 60 to 1,500 metres.

Reliance Infrastructure was up 1% after the firm won a road project worth Rs1,725 crore in Maharashtra from the National Highways Authority of India.
Fedders Lloyd Corporation shot up 5% after a consortium of the company received an order worth Rs120 crore.

Unichem Laboratories surged 7%, after the company’s wholly-owned unit, Niche Generics, received marketing authorisation for Anastrozloe tablets in a number of markets within the European Union.

Bilpower Ltd was up 14% after it announced that its subsidiary, Tarapur Transformers, will launch an initial public offer (IPO) of 85,00,000 equity shares though a 100% book-building process.

Navin Fluorine International was up 6% on reports that the company has received 5 lakh carbon credits from the UN, valued at 7 million euros.

Gujarat Fluorochemicals gained 4% on reports that the company is likely to bag 1.5 million carbon credits, valued at 18 million  euros, in mid-December.
SRF is likely to bag 9.5 lakh carbon credits, valued at 12.6 million euros. The stock jumped 3%.

During trading hours, finance minister Pranab Mukherjee told Parliament that the government has no intention of using the proceeds of stake sales in state-run firms to cut its fiscal deficit, but would use them to fund social support programmes.
According to World Bank president Robert Zoellick, India could return to a higher growth trajectory of 8%-9 % in two years, but it needs to invest more in infrastructure for sustaining such growth. He also said that excess liquidity in the global markets is a matter of concern as it was pushing up agricultural commodity prices.

According to an RBI survey of professional forecasters, wholesale price inflation is expected to average 5.8% in fiscal year 2010-11. Based on the government’s budget estimates, India’s gross fiscal deficit at the end of the current fiscal will reach 10.2% of gross domestic product, RBI deputy governor Usha Thorat said.
Meanwhile, the UPA government cleared the introduction of the State Bank of India (Amendment) Bill. The Bill seeks to bring the government’s holding in the country’s largest public sector bank down to 51% from 59%. Under the present laws, the government’s stake in SBI cannot fall below 55 %.

However, the Cabinet has deferred a decision on the controversial Pension Fund Regulatory and Development Authority Bill (PFRDA). Although the Bill was listed in the agenda paper of the meeting, it was not discussed and is likely to be taken up in the next Cabinet meeting. The proposed legislation seeks to bring foreign direct investment (FDI) into the sector by allowing foreign players to hold up to a 26% stake in Indian pension fund companies. It will also permit pension funds to deploy a part of their corpus abroad in approved instruments.
 — Swapnil Suvarna
 

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