Mumbai: Profit sales took the fizz out of Sensex rally on Wednesday, with the bluechip index closing 0.3% lower, after hitting a fresh 32-month high in the day, with weak European shares and a likely lower opening in the U.S. markets also weighing on sentiment.
Export-focused outsourcers led the losses, with the IT sector index declining 1.3%, after rising 3% over the three previous sessions.
The 30-share BSE index dropped 0.3%, or 59.83 points to 19,941.72, with half of its components losing ground, after rising as much as 0.5% early to 20,105.54 points -- its highest since January 2008.
”The pace at which FIIs (foreign institutional investors) are pouring money cannot continue. We cannot keep moving in one direction,” said Deven Choksey, managing director and CEO of KR Choksey Shares.
Overseas investors have been gung-ho about India’s growth story and have pumped in more than $4 billion in September, pushing the benchmark index nearly 11% higher this month.
For the year to date, the Indian benchmark has added 14.1%, outperforming the broader MSCI’s measure of world equities index which have added 1.2% and 5.9% respectively in the period.
”While the valuations may have run ahead of time for key indices, there is value in individual stocks. Tata Motors, ICICI Bank and Maruti hold good promise currently,” Choksey said.
Foreign fund inflows this year look on course to set a new record. Net foreign portfolio investments so far this year, have already risen nearly $17 billion, adding to a record $17.5 billion in 2009, which had sparked an 81% rally in the benchmark.
Outsourcers such as Tata Consultancy Services and Infosys Technologies dropped 1.9% each on profit sales after the two stocks had hit record highs in the previous session.
IT services firm Mahindra Satyam extended gains to as much as 14.9% ahead of the firm’s audited financial results review for fiscal years 2009 and 2010 on 29 September.
It was the most traded stock on the BSE, with its volume of 49.4 million shares more than 17 times its 30-day average volume.
Shares in parent Tech Mahindra gained 8.2% to Rs787.40.
Sun Pharmaceutical slipped 0.2% at close after rising 3.1% to an all-time high of Rs1,984.70 after the top valued drugmaker said it had completed the acquisition of a controlling stake in Taro Pharmaceutical.
Energy giant Reliance Industries, which has the highest weight on Sensex, shed 1.3% due to lack of any immediate triggers, dealers said.
Top engineering and construction firm Larsen & Toubro slipped nearly 2%, but was still up 10% so far in the month. Automobile companies rose on hopes of buoyant demand during the September-to-December festive season.
Top car maker Maruti Suzuki rose 3.6% after Bank of America-Merrill Lynch upgraded it to buy from underperform. Mahindra & Mahindra and Hero Honda gained 0.2% and 0.1% respectively.
In the broader market, advance:decline ratio was at 1.7:1 in a moderate volume of 478 million shares.
The 50-share NSE index shed 0.3% to 5,991 points.
Elsewhere, the FTSEurofirst 300 index fell 1.2% by 4:00pm, while futures for the Dow Jones industrial average, the S&P 500 and the Nasdaq 100 were down between 0.1% to 0.2%.
Non-ferrous metals producer Sterlite Industries firmed 0.8% to Rs172.75, on firm London prices.
Crisil closed 0.6% lower at Rs6,129.95 after the ratings agency said it will buy US-based Pipal Research Corporation for a consideration of $12.75 million.