* Weak output data reinforce economic growth fears
* Ranbaxy shares hit after quarterly loss
* Cairn India drops after CEO departs
(Updates with Bharti ending at lowest since Oct 2006)
By Manoj Dharra
MUMBAI, Aug 9 (Reuters) - India shares edged lower on
Thursday after an unexpected slump in industrial output
exacerbated concerns about economic growth, while mobile carrier
Bharti Airtel continued to drop, ending at its lowest close
since late 2006 after poor quarterly earnings.
India's industrial output in June shrank 1.8 percent,
missing forecasts for 1 percent growth. The data is likely to
add pressure on new Finance Minister Palaniappan Chidambaram to
boost growth by announcing fiscal measures and action to attract
Analysts are already cutting their economic forecasts for
the year, with Moody's Analytics saying it expected India to
grow at 5.5 percent this year, in line with forecasts this week
from Citigroup and CLSA..
Corporate profits are also raising concerns. Bharti Airtel
slumped to its lowest close since October 2006, dropping for a
second day after disappointing earnings results on Wednesday,
while State Bank of India was hit by worries the lender
would post weak earnings on Friday.
"Prolonging wait for government measures, coupled with
recent worries on GDP is leading the market to book profits,"
Deven Choksey, managing director, K R Choksey Securities.
"GDP worries are, however, discounted to an extent, and
market would present opportunities to buy on dips if government
measures get materialised," he said
The 30-share BSE index fell 0.23 percent to end at
17,560.87 points, retreating from an earlier gain of as much as
The 50-share NSE index fell 0.28 percent to end at
Both indexes are still up around 2 percent each for the week
after Chidambaram promised forthcoming announcements on fiscal
consolidation and appeared to call for lower interest rates.
However, the rally seen earlier in the week is threatening
to run out of steam as no measures have been announced yet,
while optimism for more global stimulus measures that had
sparked a rally in Asian shares is also being kept in check.
ECONOMY, EARNING WORRIES
Shares seen sensitive to growth fell. State Bank of India
slumped 4.5 percent to mark its biggest percentage fall
since Feb 22, hit as well by worries the country's biggest
lender would post disappointing earnings on Friday.
Bharti Airtel dropped 6.42 percent to 256.75
rupees, its lowest close since October 26, 2006, as banks
including Goldman Sachs and Standard Chartered cut their ratings
on India's top telecoms carrier in the wake of disappointing
India's biggest telecom carrier has now dropped 12.61
percent over the past two sessions since posting its results on
Shares of Ranbaxy Laboratories, India's top drug
maker by sales, lost 2.7 percent, after reporting a consolidated
net loss of 5.86 billion rupees ($106 million) as foreign
exchange losses ballooned despite a surge in sales.
Cairn India fell 2 percent a day after the company
said its chief executive Rahul Dhir had resigned to pursue his
Dhir's departure sparked concerns about the leadership of
the company after what analysts described as his vital role in
negotiating thorny issues with the government, including
approval for pipeline costs.
Tata Motors fell 0.9 percent after posting a
smaller-than-expected rise in quarterly profit, though it pared
losses as traders said operating margins themselves were not as
bad as some had feared.
But Mahindra & Mahindra rose 2.82 percent, gaining
for a second day a fter the utility vehicle maker posted on
Wednesday better-than-expected profits.
FACTORS TO WATCH
* Euro drops as optimism about ECB action wanes
* Oil up at $112.75 on supply fears, stimulus hopes
* Stimulus hopes lift European shares near 5-mth high
* Foreign institutional investor flows
* For closing rates of Indian ADRs
ASIA-PACIFIC STOCK MARKETS:
Pan-Asia........ Japan....... S.Korea...
S.E. Asia....... Hong Kong... Taiwan....
Australia/NZ.... India....... China.....
Wall Street .... Gold ....... Currency..
Eurostocks..... Oil ........ JP bonds...
ADR Report ..... LME metals. US bonds..
Stocks News US.. Stocks News Europe
DIARIES & DATA:
Indian Data Watch Asia earnings diary
U.S. earnings diary European diary
Indian diary Wall Street Week Ahead
Eurostocks Week Ahead
For top Asian company news, double click on:
U.S. company news European company news
Forex news Global Economy news
Technology news Telecoms news
Media news Banking news
Politics/General Asia Macro data