Mumbai, March 22
The Bombay Stock Exchange Sensex fell for a sixth consecutive session on Friday to its lowest close in four months as blue chips such as State Bank of India continued to reel from concerns about political instability and doubts over the prospect of future rate cuts.

Falls also tracked Asian shares which hovered near their lowest in nearly three months as Cyprus scrambled to avoid a meltdown of its banking system and a possible exit from the euro zone.

The RBI's cautious stance on future rate cuts and the DMK's withdrawal in the ruling UPA coalition have left investors concerned about economic growth and the prospect of additional fiscal reforms, with benchmark indexes now hovering close to breaking their 200-day moving averages.

"Stocks may start looking attractive if more falls come, but political instability and developments overseas like Cyprus do not help" said Paras Adenwala, MD & principal portfolio manager, Capital Portfolio Advisors.

Political developments have made the situation very hostile, with every rise used as a selling opportunity, added Adenwala.

Brokers said investors turned extremely cautious on concern that political instability after the withdrawal of support by the DMK to the ruling UPA government and limited room to cut interest rates might undermine efforts to revive economic growth.

They said a weakening Asian trend and lower opening in Europe as Cypriot lawmakers begin a debate to unlock bailout funds and prevent a financial collapse, further influenced the market sentiment.

The BSE Sensex fell 0.3%, or 57.27 points, to end at 18,735.60. The index fell 3.6% for the week, marking a second week of losses.

The NSE Nifty fell 0.13%, or 7.40 points, to end at 5,651.35, falling for a sixth day, and marking its biggest losing streak since seven sessions of falls ending November 19, 2012.

The Nifty also fell 3.8% for the week, marking its biggest weekly loss since Dec 18, 2011. — Reuters/PTI

ICICI Bank fell 0.7%, while SBI ended 1.7% lower on fears the RBI may not ease interest rates in May after it issued a cautious statement on monetary policy on Tuesday, dealers said. — Reuters/PTI

New Delhi, March 22
The government aided its bid to avoid a credit downgrade by raising US $279 million from selling shares in state-run Steel Authority of India Ltd, but needed help from state investors to do so.

The share sale on Friday is part of the government's divestment drive to help restrict the fiscal deficit to 5.2% in the year ending March 31, to avoid becoming the first of the BRIC economies to have its credit rating downgraded.

The truncated share sale by the government in SAIL on Friday received bids for just about 98% of the offer size at the close of trading on stock exchanges. Offers for 23.53 crore shares or 97.9% of the 24.03 crore shares on offer, were received at close of trading hours, according to data from stock exchanges.

However, the auction failed to cheer the investors — both retail and institutional — and in all, the issue got 23,53,48,345 bids amounting to 97.9% of the total offer at the close of the trading hours.

The government has now raised almost the entire $4.4 billion it had sought to raise through the sale of shares in state-owned companies so far this fiscal year. It had initially hoped to raise $5.5 billion but scaled down its target later in the year.

The single-day SAIL auction received bids for a total of 241.3 million shares, at a weighted average price of Rs 63.07, stock exchange data showed.

The government was selling 240.4 million shares or 5.82% stake at a minimum offer price of Rs 63 a share, to bring down its holding in the company to 80%. The sale was the last government divestment for the current fiscal year.

For 2013/14, it has set a stiffer target of raising $7.4 billion through stake sales, and divestment candidates include top miner Coal India, top state refiner Indian Oil Corp and Engineers India Ltd.

STATE, FOREIGN BIDS: State insurance companies bid for nearly a third of the issue, two sources involved with the deal said. Foreign institutional investors bid for about 30% of the shares on offer, one of the sources said.

Analysts did not expect the offer to generate strong interest among investors, mainly because of the recent volatility in equity markets and the bearish outlook for steel demand in a slowing Indian economy.

Shares in the company have lost 30% of their market value so far in 2013, compared with a 3.6% decline in the Sensex. Of the 41 analysts covering SAIL, 20 have a 'sell' recommendation on the stock, according to Thomson Reuters Starmine data.

SAIL, with annual capacity of about 14 million tonnes, is the largest steel producer in India, but lags Tata Steel's global capacity of about 27 m tonnes. On Friday, SAIL shares closed 0.9% lower at Rs 63.35. — Reuters/PTI

New York City, March 22
Raj Rajaratnam's younger brother was indicted on charges of conspiring in the insider-trading scheme for which the founder of the Galleon Group hedge fund was convicted nearly two years ago, U.S. prosecutors announced on Thursday.

Prosecutors said Rengan Rajaratnam, 42, conspired with his older brother to trade on non-public information concerning Clearwire Corp and Advanced Micro Devices Inc in 2008.

Rengan Rajaratnam was a portfolio manager at Galleon, and the trades for which he was charged resulted in nearly $1.2 million of illegal profit, according to U.S. Attorney Preet Bharara in Manhattan, who announced the charges.

Rengan Rajaratnam was charged with six counts of securities fraud and one count of conspiracy, and faces up to 20 years in prison on each of the fraud counts. He has not been arrested. He is not in the United States and is believed to be in Brazil, a person familiar with the matter said.

David Tobin, a lawyer for Rengan Rajaratnam, did not immediately respond to a request for comment.

The charges arise from a broad U.S. government crackdown on insider trading. Since October 2009, seventy-seven people have been charged by Bharara's office in that probe, and 71 have been convicted. The FBI and U.S. Securities and Exchange Commission are still investigating.

Raj Rajaratnam, 55, received an 11-year prison sentence in October 2011 after a jury convicted him the previous May.

He is appealing his conviction, as well as the government's use of wiretaps to obtain it. Wiretap evidence was also used in the case against Rengan Rajaratnam.

"Rengan Rajaratnam and his brother shared more than DNA," Bharara said in a statement. "They also shared a penchant for insider trading."

The SEC filed separate civil charges against Rengan Rajaratnam, whose full first name is Rajarengan. The SEC lawsuit alleges a broader scheme that netted $3 million in illicit gains for Rengan Rajaratnam and hedge funds he managed following trades on stocks including Polycom Inc and Hilton Hotels.

The Polycom trade took place in January 2006 when Rengan Rajaratnam was a portfolio manager at Sedna Capital Management, which he founded in 2004. — Reuters

Mumbai, March 22
While risks arising from high inflation and fiscal slippage have receded, concerns about growth and current account deficit have worsened, which may pull down GDP growth to about 6.2 per cent next fiscal, says a Barclays report.

The report also said the efforts to reduce fiscal deficit through austerity measures is weighing on growth.

"Worries about inflation and fiscal slippage have receded, but concerns about growth and the current account deficit (CAD) have worsened," the report said, adding the widening CAD has emerged as a key near-term risk.

Accordingly, growth will also come down as, "even with the benefit of a favourable base and some improvement in industrial activity, growth is likely to improve only slowly in the coming quarters. We recently lowered our FY13 GDP growth forecast to 5.2% from 5.6% estimated earlier, and the FY14 forecast to 6.2% from 6.6%," the report said.

Referring to the expenditure cut impacting the growth prospects of the economy, the report said as expenditure control remains the key for containing fiscal deficit in the absence of rise in revenues, recovery in growth is likely to be slow.

"Expenditure control will continue to be the key to deficit reduction in the near-term, as potential upside to government revenues remains limited," the report said.

The government plans to reduce the fiscal deficit from 5.2% in the current financial year to 4.8% next fiscal.

The report also pointed out that despite government initiatives and likely monetary easing in the coming months, a turnaround in the capital expenditure cycle is likely to be only gradual as it will depend on government actions with regard to giving speedy approvals to various projects. — PTI

Mumbai, March 22
The Securities Appellate Tribunal will begin the final hearing on a plea by Sahara chief Subrata Roy against market regulator SEBI's attachment order on his bank accounts and other assets, along with those of two group firms and their top executives, on Saturday.

The matter relates to a Supreme Court direction ordering refund of over Rs 24,000 crore of investors' money raised by two Sahara group firms — Sahara India Real Estate Corp and Sahara Housing Investment Corp — through issue of bonds, wherein SEBI was asked to facilitate the refunds. After expiry of the court-set deadline for the refunds, SEBI last month issued attachment orders against the two firms and their top executives, including Roy.

Roy has approached the tribunal against the attachment orders and the plea has been posted by the tribunal for "final hearing" on Saturday.

After hearing both the sides on March 12, SAT presiding officer P.K. Malhotra had said the matter would be taken up for disposal expeditiously and posted the matter for final hearing on March 23. He had, however, refused any interim relief. — PTI