Indian Shares Erase Early Gains

(RTTNews) - Indian shares reversed early gains to end mixed on Monday following the Supreme Court ruling on coal block allocations.

Stocks rose sharply earlier in the day after remarks from Federal Reserve Chair Janet Yellen didn't give any clues on interest rate hikes. The initial euphoria paved the way for profit taking after the Supreme Court deemed all coal block allocations made since 1992 as illegal.

In a ruling that could affect several companies, the apex court declared allocation of 218 coal blocks cleared by 36 screening committees across the country as "illegal", "arbitrary" and done in "most non - transparent ways.

Meanwhile, days before announcement of GDP estimate for the first quarter of the current fiscal, global brokerage firm Nomura has upped the growth projection for 2014-15 to 6 percent from 5 percent and the FY16 real GDP growth forecast to 6.8 percent from 6.5 percent announced previously.

The benchmark S&P BSE Sensex hit a high of 26,630.74 earlier in the day before paring most of its gains to end up just 17.47 points or 0.07 percent at 26,437.02. The broader CNX Nifty index, meanwhile, closed at 7,906.30, down 6.90 points or 0.09 percent from its previous close.

Hindalco Industries plunged 9.6 percent and Jindal Steel slumped 14 percent following the Supreme Court's landmark ruling in the coal block allocation scam. Other metal stocks such as NMDC, SAIL, Hindustan Zinc, JSW Steel, Sesa Sterlite and Tata Steel dropped 2-5 percent.

Among other prominent decliners, Gail India, Axis Bank, ICICI Bank and Tata Power fell 1-3 percent. United Spirits dropped 1.2 percent, extending recent losses, after the National Stock exchange excluded the stock from the derivatives segment.

Shares of Jet Airways tumbled 5 percent. Credit rating agency ICRA has downgraded the airline's loan ratings to "D" from "BB", citing cases of defaults in servicing its debt.

Maruti Suzuki India rose 1.7 percent as Credit Suisse raised its target price on the stock. Utility vehicle manufacturer Mahindra & Mahindra hit a record high of Rs. 1,410.85 before closing 1.3 percent higher at Rs. 1,406.35.

ITC shares advanced 1.6 percent. The tobacco-to-FMCG conglomerate has replaced Tata Consultancy Services as India's most admired company, according to business magazine Fortune.

Pharma stocks saw some defensive buying after rating agency Moody's said consolidations in the Indian pharma sector will boost shareholder value going forward. Lupin, Divis Lab, Cipla and Dr Reddy's Laboratories rose 1-2 percent.

Software services exporter TCS climbed 2.4 percent, FMCG giant Hindustan Unilever rallied 2.1 percent and two-wheeler manufacturer Hero MotoCorp advanced 1.9 percent.

Sonata Software added 1.5 percent. Sonata Software North America Inc., a wholly-owned subsidiary of the company, has signed a pact to buy a controlling stake in Rezopia Inc.

Financial Technologies rallied 2 percent after the Bombay High Court granted bail to its promoter, Jignesh Shah, in the National Spot Exchange Limited (NSEL) scam worth around Rs 5,600 crore.

On the global front, the other Asian markets turned in a mixed performance as investors weighed remarks by central bankers at a high-profile gathering and remained wary of Ukraine tensions.

European stocks rallied and the euro fell to a near one-year low against the dollar after European Central Bank President Mario Draghi indicated that policymakers are prepared to roll out more monetary stimulus measures to counter deflationary risks and boost demand in the ailing euro zone economy.