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Indian shares fall for 4th day as Tata Motors slumps after earnings

MUMBAI (NewsRise) -- Indian shares fell for a fourth straight day on Thursday as Tata Motors slumped after reporting disappointing quarterly earnings. Rising geopolitical tensions triggered by the standoff between the U.S. and North Korea also weighed on risk-appetite in the region.

The BSE Sensex fell 0.8%, or 266.51 points, to end at 31,531.33, while the broader NSE index slid 0.9%, or 87.80 points, to 9,820.25. It was the longest losing streak since April for both the indices. Tata Motors fell 8.6% to 380.90 rupees after several brokerages reduced their price targets on the stock after the auto maker's latest earnings.

After market hours on Wednesday, Tata Motors said its consolidated net profit rose in the first quarter thanks to a one-time gain at its British luxury unit Jaguar Land Rover. Revenue fell 10% in the period amid weaker demand for Tata's commercial vehicles at home, as well as lower factory dispatches of JLR vehicles in all markets, excluding China. In India, the company posted a net loss of 4.67 billion rupees ($73 million) compared with a year-earlier profit of 260 million rupees. JLR's earnings before interest, tax, depreciation, and amortization margin also slipped to 7.9% in the quarter, from 12.5% a year earlier.

PhillipCapital cut the target price on Tata Motors to 455 rupees from 540 rupees. "While we were expecting this quarter to be weak due to 25% QoQ drop in volumes, such a steep fall was not anticipated," it said in a note to clients.

Global sentiment was feeble amid heightening geopolitical tensions after North Korea said it is considering launching intermediate missiles into waters near the U.S. territory of Guam. The Nikkei Asia300 Index that tracks Asian shares slid about 1% on Thursday, while all the three indices on Wall Street ended lower overnight.

"It is moderation within the bull phase, due to geopolitical tension in global as well as in the neighbouring terrain," said Vinod Nair, head of research at Geojit Financial Services. "A slowdown in business growth will lead to downgrade in earnings forecast for the next 1 to 2 quarters."

Market participants would keenly eye quarterly earnings from State Bank of India, the country's largest lender, on Friday. State Bank declined 1.9% to 296.55 rupees.

Twenty two of the 30 Sensex constituents ended lower, while overall declining issues beat advancing ones 2,214 to 360 while 109 remained unchanged.

Among other key losers, mortgage lender Housing Development Finance declined 1% to 1,714.40 rupees, while Reliance Industries, the biggest private company by revenue, finished 0.9% lower at 1,584.05 rupees.

Pharmaceutical stocks extended losses, hurt by slowing profits and increased regulatory hurdles. Dr. Reddy's Laboratories fell 4.8% to 1,948.95 rupees after the company's German arm received a non- compliance order from the Regulatory Authority of Germany for the Hyderabad plant. Pending revocation of the order, the facility will not be allowed any dispatches to the European Union.

Lupin declined 1.9% to 935.65 rupees, while Aurobindo Pharma shed 0.2% to 683 rupees after the company reported an over 11% decline in June quarter net profit.

Bharat Heavy Electricals fell 5% to 126.45 rupees. The state-run company reported a 3.9% increase in June quarter net profit boosted by a tax write-back. Standalone net profit, which does not account for income from the company's associates and joint ventures, was 808.2 million rupees in the quarter, compared with a forecast for 979.1 million rupees in a poll of analysts by Thomson Reuters.

Auto parts maker Motherson Sumi Systems declined 3.8% to 317.50 rupees after April-June net profit fell nearly 21%. Bharat Forge slipped 1.3% despite a 43.4% jump in first-quarter net profit and recommendation of issue of one free share for every held.

Bank Of India slumped 6.5% to 148.10 rupees. Nomura maintained its `Reduce' rating on the stock with a target price of 135 rupees.

GAIL India fell 3.4% to 368 rupees ahead of its April-June earnings due later Thursday.

--Dhanya Ann Thoppil

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