Indian shares eked out a modest gain on Friday as investors turned cautious ahead of state election results, while a muted response to the government's sale of shares in Oil & Natural Gas Corp raised concerns about its divestment plans.
ONGC shares fell 2.4 percent after a $2.5 billion government share auction fell just short of being fully subscribed. Top engineering company Larsen & Toubro rose 1.7 percent after an order win, while banking stocks rebounded in late trade after falling in the previous session. "People are cautious ahead of the state election results,"
said Neeraj Dewan, director at Quantum Securities in New Delhi. "I would say it's more of a profit-taking happening. Local institutions are not buying much." The main 30-share index closed 0.3 percent higher at 17,636.80, with 15 of its components rising.
Trade was choppy with the index falling much as 0.5 percent after starting 0.5 percent up. For the week, the index fell 1.6 percent, after losing 2 percent in the previous week. The market will be open on Saturday for a 1-1/2 hour special trading session to test new software.
The main index is up more than 14 percent in 2012, helped by net foreign fund inflows of more than $7 billion. Asia's third-largest economy grew at its weakest annual pace in almost three years in the three months to December, data showed this week. But investors are betting on a cooling off in inflation and possible monetary easing.
ONGC, the country's biggest oil producer and second largest company by market value, closed 2.4 percent lower at 281.40 rupees, after falling as much as 4.2 percent. The glitch-ridden auction on Thursday saw just 98.3 percent of the shares taken up. Media reports said state-run Life Insurance Corp of India (LIC) had bought a huge chunk of the shares. LIC was not available for comment.
"Definitely this is not a happy state of affairs," said K.K. Mital, a fund manager at Globe Capital Market in New Delhi. "I think it will have an impact on the further divestment programmes the government is planning." DLF Ltd, India's biggest listed property developer, fell 4.8 percent to 203.85 rupees, extending the previous day's losses after Canadian investment research firm Veritas said the stock was worth about 100 rupees "in a best case scenario". DLF called the report "presumptive and mischievous."
ICICI Bank rose 2.2 percent, after falling 2.5 percent in the previous session. Top lender State Bank of India rose 1.3 percent, while the sector index added 1.41 percent. The 50-share NSE index rose 0.37 percent to 5,359.35. In the broader market, there were 747 losers for 689 gainers on total volume of 777.5 million shares.
Shares in MphasiS, a mid-sized software services company, slumped 9.4 percent to 392.80 rupees after it reported an 18.5 percent fall in quarterly earnings. Max India rose 4.2 percent to 168.95 rupees after Goldman Sachs upgraded the stock to 'buy' from 'neutral', while retaining its target price of 200 rupees.
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