Mumbai: Shares fell for the sixth session in a row on Tuesday, their longest losing run in a year, as rate rise concerns continued to rattle investors, who were also sceptical of quarterly earnings that begin this week.
Feeble attempts to pull out of the slide failed to hold and the market dropped to its lowest close in six weeks, taking losses since the start of the new year to 6.4%. Volume was relatively light and trading choppy.
The 30-share BSE index ended down 0.14% or 27.78 points at 19,196.34, after rising as much as 1.1% early and then falling more than 1% at one stage. The 50-share NSE index slipped 0.2% to 5,754.10 points.
Fourteen of its components closed in the red.
“There are a lot of headwinds,” said Sanjeev Patni, president and head of institutional equities at Prabhudas Lilladher. “Stubbornly high inflation, stretched liquidity, uncertain political scene, spiralling commodity prices are issues which are worrying.”
Software services majors shed the most as investors locked in profits after a big run up in 2010.
Infosys Technologies, which kick starts the earnings season on Thursday, shed nearly 2% after the bellwether had gained almost a third in 2010.
Bigger rival Tata Consultancy Services shed 2.6%, while Wipro bucked the trend and firmed 0.9%.
Export-driven outsourcers are expected to report robust growth in quarterly earnings and a firm outlook, driven by an expected increase in clients’ technology budgets.
A Reuters poll showed Infosys should report a 15.1% rise in December quarter profit from year ago.
Financials, which had taken a beating on rate worries, pulled back. The banking sector index gained 1.2%, after declining 7.5% over previous sessions.
Leading lenders State Bank of India and ICICI Bank gained 2.5% and 0.9% respectively.
Data showed auto sales in 2010 grew a record 31%, driven by a burgeoning middle class in Asia’s third-largest economy, but analysts forecast a slowdown amid high comparisons, a likely hike in interest rates, and rising fuel and vehicles costs.
Automakers closed mixed. Tata Motors and Maruti Suzuki shed 1.5% and 0.3% respectively while Mahindra & Mahindra, Bajaj Auto and Hero Honda gained between 0.9% and 3.4%.
In the broader market, gainers beat losers in the ratio of 1.7:1 but volume was low at 271 million shares, compared with average 90-day daily average volume of 445 million.
World stocks as measured by MSCI were up 0.2% by 1039 GMT while emerging markets gaining 0.6%.
Hindalco gained 3.5% to Rs 230.50 after CLSA upgraded the aluminium maker’s earnings estimate and metal prices recovered in the global market, dealers said.
CLSA has raised the company’s earnings per share forecast for FY12-13 by 9-12%.
Software services firm Patni Computer Systems shed 3.9% to Rs 445.70 even after US-listed software firm iGate, which has bought a majority stake, made an open offer for another 20.6% at Rs 503.50 each.
HCL Technologies firmed 2.2% to Rs 474.55 rupees after Credit Suisse upgraded the software services firm to outperform from neutral and raised the target price to 600 rupees from Rs 400.