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Asia300

India shares little changed ahead of company earnings

MUMBAI (NewsRise) -- Indian shares were little changed on Monday as investors remained cautious ahead of the start of December quarterly earnings amid lackluster regional cues.

The benchmark BSE Sensex index declined 0.1% to 26,726.55 points and the broader NSE Nifty 50 index ended little changed at 8,236.05 points. Dr. Reddy's Laboratories slipped 3% to 3,066 rupees, and Lupin and Sun Pharmaceutical Industries declined over a percent each, as the BSE Healthcare index snapped a nine-session winning streak. Tata Consultancy Services, which reports earning on Thursday, rose 0.9% to 2,303.75 rupees.

"There is some caution driving the market ahead of the results season, which will reflect the impact from demonetization," said G. Chokkalingam, managing director at Equinomics Research & Advisory. "As for the outlook, the market could see further downside ahead of the budget."

India's federal government will present its budget for the 2017-18 fiscal year on Feb. 1.

India's advance estimate of economic growth for the year ending March 2017 was cut to 7.1% from 7.6% on Friday. The forecast does not consider the impact from the demonetization decision in November.

"The FY2017 first advance estimate does not factor in much of the post-demonetization scenario. This significantly reduces the efficacy of the estimate for any policy formulation in the current juncture," Kotak Securities said in an investor note. "However, the rationale for a budgetary stimulus stems from weak consumption and investment growth estimates even without much demonetization impact."

Asian markets treaded cautiously after Friday's U.S. December jobs report revealed that the economy added 156,000 jobs and wage growth rose at its fastest pace last year since 2009. The strong U.S. wage gains further increased expectations of monetary tightening by the Federal Reserve. The Nikkei Asia300 index was little changed on Monday.

The possibility of increased pace of rate increases by the Fed has been weighing on Asian markets since Donald Trump's victory, which has boosted expectations that inflation and growth will pick as the President-elect pursues expansive fiscal policies. The Fed last month increased the expected number of rate hike it expects this year to three.

Eighteen of the 30 Sensex constituents ended lower, while overall advancing stocks beat declining ones 1600 to 1206, with 140 issues ending unchanged.

Mahindra & Mahindra fell 1.4% at 1,203.35 rupees. Television channel ET NOW reported earlier in the day that the company may have cut its production estimates for the next three months and that its products TUV and Bolero may see steep cuts going ahead. The company recently posted a 4% decline in December sales.

Oil & Natural Gas Corp. slipped 2.2% to 198.05 rupees, following a near 6% rally last week. Crude prices were down more than 1% on Monday.

In rest of Asia, Hong Kong rose 0.3% and China added 0.6%, while South Korea ended little changed. Japan markets were closed Monday.

--Dhanya Ann Thoppil

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