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Business News/ Market / Stock-market-news/  Markets fall for second day; SBI leads declines
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Markets fall for second day; SBI leads declines

BSE ends down 0.86% while NSE falls 0.91%; earnings of SBI, Tata Steel, ONGC disappoint

Falls also tracked lower global share markets which were on course for their worst weekly performance since June on Friday as concerns over the US fiscal cliff and the outlook for Europe hit sentiment. Photo: HT (HT)Premium
Falls also tracked lower global share markets which were on course for their worst weekly performance since June on Friday as concerns over the US fiscal cliff and the outlook for Europe hit sentiment.

Photo: HT
(HT)

Mumbai: India’s main index fell on Friday, posting its biggest weekly fall in four weeks, led by falls in State Bank of India, after the country’s biggest lender posted its smallest profit increase this year as bad loans constrained earnings growth.

Falls also tracked lower global share markets which were on course for their worst weekly performance since June on Friday as concerns over the US fiscal cliff and the outlook for Europe hit sentiment.

At home, earnings results of key companies such as Tata Steel Ltd, Oil and Nautral Gas Corp. Ltd also aided the two-day fall to give away gains made earlier this week.

In a holiday-shortened week ahead, the markets would focus on release of September factory data on Monday and inflation on Wednesday.

India’s industrial production likely grew at a steady but slow annual pace in September, lifted by infrastructure output, in what is likely to be further evidence of a sluggish economy, a Reuters poll showed.

“Market may remain volatile in near term as the US ponders over tax increases and some key earnings disappoint," said Rahul Jain, senior vice president, institutional equity sales, at Prabhudas Lilladhar.

But as valuations don’t look expensive, markets can go higher by the year end if capital flows sustain, he added.

The 50-share NSE index fell 0.91% or 52.50 points to 5,686.25, falling 0.2% in the week, closing below the psychologically important level of 5,700.

Trading volumes are likely to remain low next week as the stock market will be closed on Tuesday and Wednesday for Diwali holidays, but a special trading session will be held on Tuesday.

State Bank of India fell 3.9%, marking its biggest single-day fall since 30 October as its September quarter asset quality disappointed investors.

The state-owned bank, which has exposure to debt-laden firms such as Kingfisher Airlines Ltd, Air India Ltd and Deccan Chronicle Holdings Ltd, said bad loans rose to 5.15% of its loan book as of the end of September from 4.19% a year earlier.

Among other key earnings, Tata Steel fell 3.32% after reporting a surprise quarterly loss of 364 crore ($66.8 million) as weakening demand and prices in its main European market offset a solid performance at home.

Shares in state-run Oil and Natural Gas Corp. ended 3.05% lower a day after posting a bigger-than-expected fall in July-September net profit due to higher subsidies. Among gainers, United Spirits rose 1.3% while United Breweries Holdings Ltd rose 3.2% after Diageo Plc agreed to buy a 53.4% stake in United Spirits for 11,167 crore ($2.05 billion).

Diageo will buy a 27.4% stake in United Spirits and will launch a mandatory tender offer to buy 26% more from the public shareholders of United Spirits.

UB group’s debt-laden Kingfisher Airlines also ended 4.65% higher following the Diageo deal on hopes the money raised could be used to revive the carrier.

Ashok Leyland rose 6.6% a day after posting July-September earnings that were above forecasts.

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Published: 09 Nov 2012, 10:07 AM IST
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