Bangalore: Indian shares inched lower in flip-flop trading on Tuesday, as profit sales kicked in following robust foreign fund inflows-led rally, which helped the benchmark index log 11.9% gains so far this month.
The market was likely to remain volatile leading up to the expiry of derivatives on Thursday as investors adjust their positions, dealers said.
By 11:43am, the 30-share BSE index was down 0.1% at 20,091.93 points, with 14 of its components in the red. It had risen as much as 0.2% early to 20,157.51 points.
“This has more to do with the global cues than anything else. Till the expiry, the market is likely to be volatile and move in a narrow range,” said Gaurav Dua, head of research at brokerage Sharekhan.
The US market on Monday took a breather from a four-week rally, as nagging European bank and sovereign debt concerns dampened risk appetite, depressing markets across Asia.
“We have had a nice move,” said Dua referring to the Sensex. ”Our base case is the market will stabilise at these levels.”
Foreign funds have invested $4.8 billion into Indian shares this month, taking net investment so far in 2010 to $17.7 billion -- more than last year’s record $17.5 billion inflows. Investors booked some profit in financials stocks that have been riding up on a robust loan demand outlook in the world’s second-fastest growing major economy.
Top private sector lenders ICICI Bank and HDFC Bank were down 0.7% and 0.3% respectively, while mortgage lender Housing Development Finance Corp shed 1.5%. However, top lender State Bank of India bucked the trend, gaining 0.2%.
Mahindra & Mahindra rose as much as 2.5% to Rs711.60 after India’s top utility maker said it would raise prices of its vehicles by Rs3,000-8000 ($67-$178), effective 1 October, due to higher input costs and new emission norms.
Reliance Communications was up 2.5% ahead of the company’s shareholder meeting, dealers said.
Metal makers, which led the gains on Monday, shed some of it. Aluminium maker Hindalco Industries, which scaled a 32-month peak in the previous session, fell 1.2%. Non-ferrous metals producer Sterlite Industries, a unit of London-listed Vedanta Resources, was down 0.5%. However, Tata Steel (TISC.BO), the world’s seventh-largest maker of the alloy, was up 0.1%.
In the broader market, advancers led decliners 1.2:1 on a volume of 283 million shares.
The 50-share NSE index .NSEI was down 0.2% at 6,022.15 points.
The MSCI’s measure of Asian markets other than Japan was down 0.2%, while Japan’s Nikkei fell 1.1%.
Lanco Infratech rose as much as 1.8% after a senior official told the Reuters India Investment Summit the company would consider an initial public offering for its power business, which is expanding to meet rising demand in Asia’s third largest economy. At 11:54am, it was trading 0.9% higher at Rs69.
Shares in Mercator Lines jumped more than 4% after the shipping firm said its board would meet on 30 September to consider fund-raising via equity or warrants convertible into equity on preferential basis to founders or others. Its shares were up 3.3% at Rs57.20.
Shares of GEI Industrial Systems rose nearly 6% after the maker of heat exchange equipment said it has won contracts worth Rs135 crore shares were up 2.9% at Rs186.25.
Venus Remedies Ltd gained more than 6% after the drugmaker said it received Thai government’s licence for supply of anti-cancer drug Docetaxel. The contract is valid for one year and is expected to generate business of more than Rs100 million for the company. It was trading up 3.4% at Rs315.50.