Sensex falls on earnings caution; ITC hits record high

MUMBAI (Reuters) - The BSE Sensex fell on Friday as Reliance Industries extended a recent losing run on continued worries about the outlook for its refining margins and as recently outperforming financial stocks such as HDFC were hit by profit-taking.

However gains in ITC Ltd to a record high capped broader losses after the cigarette maker posted a 22 percent surge in July-September earnings despite the challenge of higher taxes and tighter anti-smoking rules in several states.

Indian shares have struggled recently, with the Sensex down 0.4 percent this month after rallying 7.7 percent in September, as the impact from the government's fiscal and economic reforms fade.

Investors are holding hope the Reserve Bank of India will cut interest rates at its policy review on October 30, although most analysts expect only a token 25 basis point cut in the cash reserve ratio, or the amount of deposits lenders must keep with the central bank.

"For the week, the Sensex has ended lower on the back of profit booking and absence of fresh triggers for the market," said Sanjeev Zarbade, Vice President of the Private Client Group Research at Kotak Securities, in an emailed note.

The Sensex fell 0.58 percent, or 109.62 points, to 18,682.31. The index rose 0.04 percent for the week.

The 50-share Nifty lost 0.6 percent, or 34.45 points, to 5,684.25, but added 0.14 percent for the week.

Earnings have been a key driver of share performance.

Reliance Industries fell 1.05 percent, bringing its losses to 2 percent for the week, on worries about whether the energy conglomerate can sustain the rebound seen in its refining margins for the July-September quarter out on Monday.

Battery maker Exide industries shares slumped 8.9 percent after profit and margins missed market estimates as higher costs dented operating performance.

Adani Power Ltd dropped 2.4 percent after swinging to a July-September net loss of 2.6 billion rupees from a 1.7 billion profit a year ago.

Bank shares fall on profit-taking: ICICI Bank lost 0.7 percent after gaining 18 percent since the end of August to Thursday's close, outperforming the Nifty which gained 8.75 percent during the same period.

HDCF Bank lost 1.2 percent, while mortgage lender HDFC declined 1.1 percent.

Shares in Kingfisher Airlines dropped 4.6 percent.

However, among gainers, shares in ITC rose 2 percent, after earlier hitting a record 299 rupees. The tobacco firm's higher cigarette prices protected margins from stagnant volume growth.

Shares in jewellery companies, gained on hopes of a spike in jewellery sales ahead of the festive season in India, when consumer spending appetite traditionally increases.

Shree Ganesh Jewellery gained 8.9 percent while Tribhovandas Bhimji Zaveri Ltd gained 10.9 percent.

(Editing by Rafael Nam)

Source: http://news.yahoo.com/sensex-down-itc-hits-record-earnings-090150286--finance.html

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