By RTT News, September 16, 2013, 07:25:00 AM EDT
(RTTNews.com) - Indian shares erased early sharp gains to end largely unchanged on Monday after government data showed India's wholesale inflation unexpectedly rose to a six-month high of 6.1 percent in August as compared to 5.79 percent in July, making it tough for new RBI chief Raghuram Rajan to balance growth and inflation when he unveils his first monetary policy decision on 20th. Soaring food prices caused maximum damage to the August WPI inflation numbers. Food prices will decline in the coming months on the back of good monsoons this year, Dr C Rangarajan, chairman of the Prime Minister's Economic Advisory Council, said.
The BSE Sensex rose over 200 points early in the session before paring most of its gains to end up 10 points or 0.05 percent at 19,742. The broader Nifty index ended in the red, falling 10 points or 0.17 percent to 5,841. The rupee, however, traded firm at 62.62 per dollar in the afternoon.
Shares of Ranbaxy Laboratories plunged 30 percent after the U.S. Food and Drug Administration issued an import alert on drugs manufactured at the company's Mohali unit. IT stocks Infosys, TCS, Wipro and HCL Technologies fell 1-5 percent amid continued recovery in the rupee. Jaiprakash Associates, Tata Power, Grasim, Lupin, SesaGoa, UltraTech Cement and BHEL lost 3-5 percent.
Oil marketing firm BPCL rallied 4 percent after raising petrol prices effective from September 13. Brent crude futures were down 1.5 percent in late Asian deals, dipping below $110 per barrel for the first time since Aug. 23 after U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov reached an agreement on a framework for Syria to destroy all of its chemical weapons.
HDFC Bank rose over 2 percent after the private sector lender increased its stake in HDFC Securities to 89.88 percent. Hero MotoCorp, Power Grid Corp, Axis Bank, Bharti Airtel, ICICI Bank, Maruti Suzuki and IndusInd Bank rose 3-4 percent.
On the global front, the Asian markets rose broadly and European stocks rose to five-year highs as investors cheered the prospects of a more protracted easing cycle. Lawrence Summers, the former Treasury secretary and senior White House economic adviser, has withdrawn from consideration to succeed Ben Bernanke as Federal Reserve chairman, the White House said on Sunday, paving the way for Federal Reserve Chairwoman Janet Yellen, who is perceived by markets as more QE friendly.
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