ArrowArtboardCreated with Sketch.Title ChevronCrossEye IconIcon FacebookIcon LinkedinShapeCreated with Sketch.Icon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Markets

India shares fall, dragged down by commodity producers, Tata Motors

Oil & Natural Gas, Zee Entertainment among gainers

MUMBAI (NewsRise) -- Indian shares fell Wednesday, reversing their earlier surge to record highs, amid losses in industrial commodity producers, Tata Motors, and Hindustan Unilever.

The benchmark BSE Sensex closed 0.4% lower at 36,373.44 and the broader Nifty 50 Index dropped 0.25% to 10,980.45. Tata Steel, Tata Motors, and Hindustan Unilever were among the biggest losers, while Oil and Natural Gas Corp., Zee Entertainment Enterprises, and HDFC Bank advanced.

Earlier in the day, the Sensex climbed to a record 36,747.87 on the back of an overnight rally on the Wall Street. The S&P 500 Index climbed back to its highest in almost six months after Federal Reserve Chair Jerome Powell delivered an upbeat view of the U.S. economy. Powell said that the job market in the world's largest economy remained robust and inflation was likely to remain near the target level for coming years.

Sageraj Bariya, vice president of institutional sales at Mumbai-based East India Securities, said "Powell's testimony was music to investors' ears" and that "the hush in trade war banter (between the U.S. and China) had provided a breathing space for investors to focus on earnings."

The Indian equities were poised to extend the rally once investors get "acclimatized to the higher altitude," he added.

The decline in the offshore-traded Chinese yuan to its lowest level against the dollar in more than a year contributed to the intraday turnaround on the Sensex and other regional indexes. The offshore-traded yuan dropped 0.5% against the dollar to below the psychologically important 6.75 level.

The Shanghai Composite, Hong Kong's Hang Seng Index, and South Korea's Kospi also closed lower after advancing earlier.

Aluminum producer Hindalco Industries declined 3.5%, zinc miner Vedanta slipped 3%, and Tata Steel fell 5.2% after the dollar strengthened following Powell's remarks, hurting commodity prices.

Hindustan Unilever declined 2.4%, adding to its losses on Tuesday after its first-quarter earnings. While the company's sales volume surprised positively, at least two brokerages downgraded the stock, citing valuations.

Tata Motors dropped 2.2%. Media reports said the company will raise prices of its passenger vehicles by up to 2.2% from next month to offset higher input costs.

Zee Entertainment Enterprises climbed 0.8% to 521.40 rupees after reporting a 31% rise in net profit for the June quarter, helped by higher subscription revenue and a revival in adverting spending.

Morgan Stanley said in a note that industry advertisement spending is likely to remain robust, which bodes well for the company. It pointed out that domestic advertising growth of around 22% was better than expected, and maintained the `overweight' rating and the target price of 610 rupees per share.

Oil and Natural Gas Corp. advanced 2.7% to 160.30 rupees. JP Morgan reportedly maintained the 'overweight' rating and its 265-rupees target price.

Fuel retailers rose for the second day after Brent crude hovered around three-month lows. Bharat Petroleum, Hindustan Petroleum, and Indian Oil rose by up to 2.2%.

Sintex Industries rallied 0.6% after the water tank manufacturer reported an 11% rise in net profit for the April-June quarter. Bandhan Bank jumped 6.8% after reporting a 47% rise in April-June net profit.

--Nimesh Vora

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

{{sentenceStarter}} {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} this month

Stay ahead with our exclusives on Asia; the most dynamic market in the world.

Benefit from in-depth journalism from trusted experts within Asia itself.

Try 3 months for $9

Offer ends September 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media