Pakistani stocks fall after rates kept on hold

Pakistani stocks fell in early trade on Monday as investors reacted bearishly to a decision by the central bank over the weekend to leave interest rates unchanged despite an alarming slowdown in the economy, dealers said.

The Karachi Stock Exchange (KSE) benchmark 100-share index .KSE was 0.70 percent, or 37.85 points, lower at 5,339.57 points on turnover of 14.3 million shares by 9:43 a.m.

"There were some hopes in the market that the central bank might cut the interest rates by 50 basis points," said Sajid Bhanji, a dealer at brokers' Arif Habib Ltd.

Dealers said investors were also booking profits as the KSE-index gained 9 percent last week.

Pakistan's central bank said on Saturday its key policy discount rate would be left unchanged at 15.0 percent, although economic growth was set to fall to 3.7 percent in the fiscal year, the slowest since 2000/01.

The central bank raised interest rates by 2 percentage points in November, the same month it signed a $7.6 billion loan with the International Monetary Fund to stave off a balance of payments crisis.

State Bank of Pakistan Governor Salim Raza said there would be another review in April, leaving open the possibility of a change in rates later.

Analysts had expected the central bank to keep interest rates on hold but say the need for rate cuts is becoming more urgent as the economy weakens.

The government's top economic official said last authorities might start cutting interest rates this year as inflation eases.

Sensex below 9100; DLF, JP Associates, HDFC plunge

MUMBAI: Selling in frontline stocks intensified Monday as traders squared positions following a weak opening of European markets. Poor results from real estate companies and rate sensitive banking stocks were the worst hit.

At 2:35 pm, Bombay Stock Exchange’s Sensex was at 9080.10, down 344.14 points or 3.65 per cent. The index touched an intra-day low of 9071.39 and high of 9363.58.

National Stock Exchange’s Nifty was at 2774.50, down 100.3 points or 3.49 per cent. The broader index touched a low of 2764.75 and high of 2873.45.

BSE Midcap Index was down 0.88 per cent and BSE Smallcap Index declined 0.78 per cent.

DLF (-12.27%), Jaiprakash Associates (-10.49%), Reliance Infrastructure (-7.61%), HDFC (-6.54%) and Hindalco (-5.91%) were the top Sensex losers.

Maruti Suzuki (0.53%) was the lone index gainer.

All sectoral indices were in red with realty being the worst hit on account of poor results. BSE Realty Index was down 8.89 per cent, BSE Metal Index fell 4.72 per cent, BSE Bankex declined 4.34 per cent and BSE Oil&gas index was down 2.78 per cent.

Maruti Suzuki announced highest ever domestic and total sales in January. During the month, the company sold 67,005 units in the domestic market, up 5.6 per cent over corresponding month last fiscal. The previous highest monthly domestic sales were 65,216 units in November 2007.

DLF 's net profit for quarter ended Dec was down 68.72 per cent to Rs 670.79 crore from Rs 2144.98 crore in the same quarter a year ago. Revenues fell 62.02 per cent to Rs 1366.67 crore from Rs 3598.42 crore. Other income was up 157.65 per c ent to Rs 136.12 crore from Rs 52.83 crore.

Unitech’s Q3 net profit was down 74.12 per cent to Rs 136.05 crore, sales was down 57.15 per cent to Rs 489.39 crore. The company is in talks with three private equity players to sell about 20-26 per cent of its equity for an estimated Rs 2,500 crore. The funds would go into diluting its debt load, which is currently at Rs 8,000 crore. The scrip was down 8.24 per cent.

Indiabulls Real Estate Q3 consolidated net profit was at Rs 11.33 crore versus Rs 25.84 crore. Net sales stood at Rs 38.95 crore from Rs 81.56 crore. The stock was down 9.63 per cent.

Sensex declines most in three weeks, loses 3.8%

The 30-share BSE index ended at 9,066.70, 357.54 points down and 50-share NSE Nifty lost 108.20 points to close at 2766.65
Mumbai: The Bombay Stock Exchange’s (BSE) benchmark index fell the most in three weeks on Monday. Auto makers and developers declined after Tata Motors Ltd posted a loss and Mahindra and Mahindra Ltd (M&M) and DLF Ltd reported earnings that lagged behind analysts’ estimates.

Tata Motors fell 3.9%, while M&M declined 3.5%. DLF dropped 14% to its lowest since it went public in 2007.

“Analysts have overestimated company earnings,” said Jayesh Shroff, who helps manage $2 billion (Rs 9,800 crore) in equities at SBI Asset Management Co. Ltd in Mumbai. “They haven’t estimated the extent of erosion in profits correctly.”

The Sensex fell 357.54 points, or 3.8%, to 9,066.70, the most since 7 January. The S&P CNX Nifty index on the National Stock Exchange (NSE) slid 108.15 points, or 3.8%, to 2,766.65.

DLF fell 14% to Rs153. The company reported a 69% drop in third quarter (Q3) net income to Rs671 crore on 31 January. That was lower than the Rs1,590 crore median estimate of analysts surveyed by Bloomberg. DLF had its rating cut to “reduce” by Kotak Institutional Equities Research after the earnings.

Unitech Ltd traded 8.9% lower at Rs29.30. Profit declined 74% to Rs136 crore, missing the Rs300 crore median estimate in a Bloomberg survey.

Tata Motors dropped 3.9% to Rs143.75 after reporting its first quarterly loss in seven years. The company had a net loss of Rs263 crore in the quarter ended 31 December. The median estimate in a Bloomberg survey was for net income of Rs14.20 crore. The loss doesn’t include financials of Jaguar and Land Rover.

M&M fell 3.5% to Rs291.75 after Q3 profit tumbled by 99%, more than expected, as currency losses mounted and sales fell. Net income in the three months ended 31 December dropped to Rs1.20 crore, lagging behind the Rs109 crore profit estimate of analysts surveyed.

Kingfisher Airlines Ltd dropped Rs2.35, or 6.7%, to Rs32.70 after the company said its Q3 loss widened to Rs413 crore, from Rs191 crore a year earlier.

SpiceJet Ltd declined Re0.74, or 5.3%, to Rs13.26 after the company reported a Rs17.96 crore net loss in the three months ended December, compared with a Rs9.34 crore profit a year earlier.

State Bank of India fell Rs55.20, or 4.8%, to Rs1,095.80 after the lender said it will keep interest rates on new home loans unchanged at 8% for a period of one year.