Sensex snaps four-day winning streak on profit-taking

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex fell on Friday, snapping a four-day winning streak, led by declines in lenders such as ICICI Bank on profit-taking, after recent steep gains on rate-cut hopes were seen as overdone ahead of the Reserve Bank of India's (RBI) annual policy review next week.

Traders said rise of about 6.4 percent in the benchmark index in the last two weeks as of Thursday's close, showed the market had already discounted a rate cut and current levels were widely used to lighten up positions ahead of the RBI's policy review on May 3.

Traders are optimistic that the recent slide in gold and oil prices will help bring the current account deficit down, thereby providing more room for the RBI to cut rates to help stoke GDP growth. They also expect analysts to raise their FY14 earnings estimates.

 

"Market fell on some profit booking, and it may continue to consolidate ahead of the RBI rate decision," said Vivek Mahajan, head of research at Aditya Birla Money.

Nifty is expected to move in the range of 5750-5950 ahead of the next trigger which is most likely to be RBI policy, added Mahajan.

The benchmark BSE Sensex fell 0.62 percent, or 120.13 points, to end at 19,286.72, reverting from the highest close in more than a month on Thursday, while gaining 1.4 percent for the week.

The broader Nifty declined 0.76 percent, or 44.85 points, to end at 5,871.45, while gaining 1.5 percent for the week.

ICICI Bank Ltd ended 2.8 percent down on profit-taking after posting a 21 percent rise in fourth-quarter net profit, in line with estimates, led by higher loan growth.

Other lenders such as State Bank of India fell 2 percent on worries that a rate-cut by the RBI on May 3 was already discounted at current valuations, dealers said.

Siemens India Ltd shares fell 3.5 percent after it said its Jan-March net profit declined 89.93 percent to 299.5 million rupees.

Technology shares, which had slumped after posting disappointing results and outlook, continued their declines after a brief pause on Thursday. Infosys Ltd fell 0.7 percent and Tata Consultancy Services Ltd ended 2.4 percent lower.

Consumer goods stocks, ITC Ltd and Hindustan Unilever Ltd fell 0.3 percent and 2.8 percent, respectively, on concerns about valuations and volume growth, dealers said.

Jindal Steel & Power Ltd shares fell 4.3 percent after it said on Thursday its March-quarter consolidated net profit fell 34.88 percent to 7.60 billion rupees.

Jindal Steel's low Jan-March realisations also had a rub-off on Tata Steel Ltd's shares which ended 2.4 percent lower.

However, among stocks that gained, Maruti Suzuki Ltd rose 5.2 percent after defying the worst slowdown in 12 years for India's car market with an 80 percent rise in fourth-quarter profit, benefiting from robust sales of its Ertiga multi-purpose vehicle and a sharp decline in the yen.

Idea Cellular Ltd rose 5.1 percent after Jan-March earnings beat estimates on Thursday due to strong customer additions and a court decision that removed some smaller competitors from the market.

Bharti Airtel Ltd's shares also gained 4.8 percent on expectations of better-than-expected earnings for January-March, taking cues from Idea Cellular Ltd which beat March quarter earnings estimates.

(Editing by Anand Basu)