India Shares Post First Annual Fall in Three Years

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Indian shares finished in the red Friday, bringing to an end a season--and year--which has been far from festive for investors. The market posted its first annual fall in three years.

"Pessimism is at its peak. Everybody right now is a disbeliever in the market, and that will set the context for the next year, but it may not be all that bad," said Vikas Khemani, head of institutional equities at Edelweiss Securities.

Shares reversed early gains Friday to fall for a fourth straight session, ignoring advances in most Asian bourses on worries over slowing economic growth and that a weak Indian rupee will hurt corporate earnings.

The Bombay Stock Exchange's Sensitive Index fell to its lowest in more than a week. It lost 89.01 points, or 0.6%, to close at 15454.92. This was its lowest since finishing at 15175.08 on Dec. 20.

The Sensex fell 4.1% in December and 24.6% this year. Its worst monthly performance in 2011 was in January, when it dropped 10.6%

On the National Stock Exchange, the 50-stock S&P CNX Nifty lost 21.95 points, or 0.5%, Friday to close at 4624.30.

Trading volume in the BSE's cash segment was 14.81 billion rupees ($280 million), almost flat compared with Thursday's 14.18 billion rupees. Decliners outnumbered gainers 1,451 to 1,327, while 134 stocks were unchanged.

The Indian equity market has been one of the worst performing globally, down around 35% for 2011 in dollar terms, Dipen Shah, head of fundamental research at Kotak Securities, said in a note.

"The equity markets seem to have substantially priced in the worst. Thus, the downside seems limited to not more than a 10% fall from the current level," Shah said.

"Unless the macro-economic environment improves, inflows from foreign funds are unlikely to come by in a hurry," said Mr. Khemani.In 2011, foreign investors net sold $242.20 million worth of Indian shares, one of the main reasons for the market's weak performance. They bought a net $29.36 billion of shares in 2010, data from the Securities and Exchange Board of India showed.

Energy major Reliance Industries declined 2.8% to 692.90 rupees.

The BSE's bank index reversed early gains to end lower on concerns over asset quality and an anticipated rise in restructuring of loans.

Housing Development Finance fell 0.9% to 649.45 rupees, while HDFC Bank dropped 0.8% to 427.05 rupees.

Hindustan Unilever fell 1.3% to close at 407.80 rupees.

Infosys, which surpassed Reliance as the stock with the highest weight in the index, bucked the trend, rising 0.8% to 2,765.05 rupees.