Mumbai: Indian shares snapped a three-day rising trend to close 0.2% lower on Thursday, as traders booked profits after shares tested a fresh 30-month high, with Reliance Industries leading the decline.
Top-listed Reliance Industries closed 0.9% lower at Rs1,006.95, after rising as much as 1.2% early.
The energy major said it will pay $392 million to take a 60% interest in a joint venture with Carrizo Oil & Gas, its third shale gas acquisition in the US this year.
“While this (deal with Carrizo) is low risk, it will also be low return in our view,” Sanford C. Bernstein said in a note. “Given the risk of dilution to returns from international M&A and diversification, we rate Reliance as Market Perform with a price target of Rs1,160.”
The 30-share benchmark BSE index fell 0.24%, or 44.61 points to 18,172.83, with 19 of its components losing ground. It hit an intra-day high of 18,295.43 points, its highest since February 2008.
It has outperformed broader indexes such as MSCI’s emerging markets index and its measure of Asian markets ex-Japan which have risen 2.2% and 0.3% respectively so far in 2010, while its measure of world equities have dropped 0.9%.
“From here on, bouts of profit booking cannot be ruled out. But, overall, the market will stay rangebound in the near term,” said Deven Choksey, managing director and CEO of K.R. Choksey Shares.
“I would advise buy on dips’ and sell on rise’ strategy in the current market,” he said adding that he expects Sensex to hover in the 17,500-18,400 range in the near term.
Foreign funds’ net investments in Indian equities have totalled to $10.8 billion so far in 2010, with primary market offerings attracting a share.
This follows last year’s record $17.5 billion inflow from them, which had driven the Sensex 81% higher.
Top utility vehicles maker Mahindra & Mahindra dropped 1.4% as three sources told Reuters the firm is expected to make a bid for up to $400 million to acquire cash-strapped South Korean automobiles firm Ssangyong Motor Co.
Financials closed mixed. While long-term robust outlook for loan demand attracted investors, there was also skepticism on fears the central bank may raise interest rates more aggressively in the rest of the fiscal year.
Leading private lenders ICICI Bank and HDFC Bank dropped 1.5% and 0.7% respectively while top lender State Bank of India climbed 2%.
Mortgage lender Housing Development Finance Corp dropped nearly 1%.
Export-oriented software firms extended gains from the previous sessions, boosted by robust quarterly numbers from peer Cognizant. Sector leader Tata Consultancy Services rose as much as 1.4% to a new record high of Rs882.
TCS closed 0.8% higher while smaller rivals Infosys and Wipro gained 0.2% and 0.5% respectively.
Leading car maker Maruti Suzuki firmed 1% as newspapers reported the company may manufacture cars for German auto firm Volkswagen’s global market on a contract basis.
Advancing shares outpaced declined ones in the ratio of 1.1:1 in the broader market, while 440 million shares changed hands on the BSE in relatively better volume.
The 50-share NSE index fell 0.4% to 5,447.10 points.
Larsen & Toubro rose 0.2% to Rs1,809.80, as the top engineering and construction firm said it has won $378 million worth of orders.
Dredging Corp firmed 1.5% to Rs579.95, as the state-run provider of transport services support systems, said its June quarter net profit soared nearly five times.
Essar Shipping and Ports jumped 18.7% to Rs108.85, as it said its April-June net rose more than six times.