Mumbai: The BSE Sensex fell 0.7% on Tuesday morning, with mixed signals from other Asian markets keeping investors cautious ahead of the outcome of the central bank’s quarterly review of monetary policy.
Private-sector lender ICICI Bank and outsourcer Infosys Technologies were among the major losers in the main index.
But gains in No. 1 listed realty firm DLF and Tata Power limited losses.
Top vehicle maker Tata Motors rose 5.6% to Rs396.10 after it reported an unexpected surge in first-quarter net profit, helped by a change in accounting policy.
The profit was released in late trade on Monday, and in a matter of minutes the shares unwound losses to be up as much as 3.9%, before ending up 0.4% at Rs374.95.
By 10:45am, the 30-share BSE index was down 0.7% at 15,270.69 points, with 19 stocks declining, after rising as much as 0.5% earlier.
The Reserve Bank of India (RBI) is expected to hold key rates steady at its policy review as growth begins to show some signs of revival and concerns about rising prices are seen deterring further cuts, a Reuters poll shows.
“We expect the RBI to maintain an unequivocally accommodative stance as the key priority for the economy is to keep interest rates low over the next six to nine months to support a revival in domestic demand,” Angel Broking analyst Vaibhav Agrawal said.
The BSE index has jumped about 14% over the past two weeks, rising on a global equity rally as a slew of strong corporate results boosted hopes for a economic recovery.
“The market is struggling at these elevated levels. There should have been a significant fall yesterday itself,” Arun Kejriwal, a strategist at research firm KRIS, said.
On Monday, the benchmark ended little changed as weak results from top listed firm Reliance Industries weakened investor appetite for riskier bets and sparked profit-taking.
Reliance, which has the most weight in the main index, fell 1.6% to Rs1,907 on Tuesday.
ICICI Bank shed 2.5% to Rs739, while No. 2 outsourcer Infosys declined 1.2% to Rs2,001.
DLF rose 3.9% to Rs428.10, while Tata Power was up 0.8% at Rs1,247.
In the broader market, gainers led losers 1,147 to 805 on relatively moderate volume of 108.8 million shares.
The 50-share NSE index was down 0.8% at 4,535.
Asian shares were mixed on Tuesday, with Japan’s Nikkei down 0.2%, while MSCI’s measure of other Asian markets rose 1%.