New Delhi, December 21: Indian shares fell 0.71 percent on Monday, a third straight fall taking them to a six-week closing low, with Larsen & Toubro and Bharti Airtel leading the losses as fund activity wound down into year-end.
Engineering and construction firm Larsen & Toubro declined 2.4 percent, contributing most to the fall in the index, and state-run infrastructure firm Bharat heavy Electricals fell 1.35 percent.
“In capital goods stocks such as Larsen & Toubro and BHEL, the institutional ownership is relatively higher,” said Vaibhav Sanghavi, director of Ambit Capital.
“Institutional participation is less with holidays coming up, and so these stocks are trading weak,” he added.
The 30-share BSE Index fell 118.63 points to 16,601.20, its lowest close since November 10, with 23 components losing ground. The index has fallen 1.9 percent this month.
The index, powered by foreign buying of $$16.5 billion of stocks up to mid-December, is up 72 percent this year. But it is about 5 percent below 17-month highs just under 17,500 hit in October, and has lost momentum as foreigners close their books for the end of the year.
“Holiday season has arrived. The market is moving on very little volumes. There is not much happening. The volumes have been low,” Sanghavi said.
Leading mobile operators Bharti Airtel and Reliance Communications fell 2.2 percent and 1.7 percent respectively on bleak sector outlook given growing competition and an intense tariff war.
“We believe there is no scope for a re-rating of telecom stocks, given the headwinds being faced by them and thus, maintain our negative view on the sector,” Karvy Stock Broking said in a note on Friday.
Energy giant Reliance Industries recovered from an early fall to six-week lows under 1,000 rupees to end up 0.6 percent at 1,016.55 rupees.
The stock has underperformed in December, on uncertainty over its bid for LyondellBasell and its court case with Reliance Natural Resources.
Bank stocks steadied after losing ground last week. The sector index gained 0.1 percent, but is still down 4.9 percent so far in December.
Sector leaders State Bank of India and ICICI Bank rose 0.1 percent and 0.2 percent respectively.
In the broader market, losers outnumbered gainers in the ratio of 1.2:1 in low volume of 318 million shares.
The 50-share NSE index closed down 0.7 percent at 4,952.60.
STOCKS THAT MOVED
* Top power producer NTPC climbed 0.5 percent to 208.15 rupees. The Mint reported the state-run firm plans to build a power project in Ghana in return for liquefied natural gas to secure supplies.
* Visual effects firm Prime Focus closed up 3.1 percent at 236.95 rupees. It received $5 million for visual effects in Hollywood sci-fi extravaganza “Avatar”. It rose as much as 10 percent in the day.
* Indiabulls Financial Services Ltd fell 2.2 percent to 125.95 rupees. It and France’s Societe Generale agreed to end their life insurance joint venture in India.
MAIN TOP 3 BY VOLUME
* Dish TV on 11 million shares.
* Unitech on 10.5 million shares
* Suzlon Energy on 6.7 million shares
—Agencies