Sensex declines; Tata Group, banking stocks tumble

By Arnab Paul

REUTERS - Indian shares looked set for a third consecutive day of losses on Thursday, hurt by another weak session for Tata Group stocks, after its ousted chairman warned of potential writedowns of nearly $18 billion.

Tata Consultancy Services , Tata Steel and Tata Motors were headed for a third straight session of declines after an internal letter sent by ousted chairman Cyrus Mistry highlighted potential writedowns to group companies in India's salt-to-software conglomerate due to poor investments.

"Tata companies have huge foreign investments and it will be interesting to keep track of the cash inflows now," said Saurabh Jain, assistant vice-president of research at SMC Global Securities.

 

"The uncertainty surrounding Tata Group coupled with expectations of weak earnings data from last quarter will dent chances of recovery in the immediate future."

Global risk appetite took further hit after technology giant Apple reported disappointing earnings on Wednesday, hitting Asian stocks after a weak close on Wall Street overnight.

The broader NSE Nifty was down 0.65 percent at 8559.10 as of 0625 GMT, while the benchmark BSE Sensex was trading 0.53 percent down at 27,688.37.

Among other decliners, banking stocks pulled down the index, contributing to almost half of the NSE index's drag, with Axis Bank trading in the red after posting disappointing September-quarter results on Tuesday.

Consumer giant Hindustan Unilever slipped as much as 2.9 percent after the company on Wednesday reported lowest volume growth in seven years.

However, cigarette maker ITC Ltd climbed as much as 2.2 percent following a five-percent increase in net profit for September quarter.

(Reporting by Arnab Paul in Bengaluru; Editing by Sherry Jacob-Phillips)