Mumbai: Shares slipped 0.2% on Friday and were on course to notch their first weekly loss in four, with foreign funds taking profits ahead of a possible rate increase later this month.
Top software services exporter Tata Consultancy Services (TCS) bucked the trend and rallied as much as 4.8%, bolstered by forecast-beating quarterly earnings.
At 11:57 am, the 30-share BSE index was down 0.19% at 18,582.78 after a firm start, with 22 of its components trading in the red.
It is down 1.5% this week after rising 5.5% over the previous three weeks. Foreign institutional investors (FIIs) have pumped in $2.5 billion since 23 June, but the inflow has slowed with data showing they were sellers in at least one day this week.
“I think that FIIs are just shifting money from one geography to another. Does not look like there are a lot of fresh flows,” said Sunder Subramaniam, senior manager of sales at brokerage Sharekhan.
“With Europe in trouble, we may benefit in short run in terms of diversion of flows, but overall risk appetite is coming off,” he said.
Financials led the drop on concerns the central bank may raise rates at its review on 26 July to tame inflation.
Inflation in Asia’s third-largest economy quickened in June, driven by higher prices of manufactured goods and fuel, data showed on Thursday.
Leading private-sector lenders ICICI Bank and HDFC Bank were down 1% and 0.3% respectively. Government-run top lender State Bank of India rose 0.5%.
Investors were also watching the progress of monsoon rains, critical to India’s trillion-dollar economy, and the investigations over Wednesday’s bomb blasts in the financial capital Mumbai.
The monsoon rains were 19% below normal in the week to 13 July, a slight pick up from a quarter below average in the previous week.
Prime Minister Manmohan Singh vowed on Thursday to bring to justice those behind triple bomb attacks on Mumbai, and police questioned members of a home-grown Islamist terrorist group.
Tata Consultancy was up 3.5%, while smaller rivals Infosys and Wipro rose 0.4% and 1% respectively.
After the market hours on Thursday, TCS beat estimates with a 28% rise in quarterly net profit as western clients increased spending on technology services, but warned of global uncertainty.
“With a strong Q1 performance, we believe the company has eased out the asking rate for the remaining three quarters to meet consensus estimates and remains a candidate for an FY12 earnings surprise,” BNP Paribas said in a note.
The 50-share NSE index was down 0.3% at 5,583.25.
Around 194 million shares changed hands on the NSE, with losers and gainers almost equal in number.
The MSCI’s measure of Asian markets other than Japan were down 0.2%, while Japan’s Nikkei edged 0.4% higher.
Stocks on the move
• Bajaj Auto was down 1.4% at Rs1,410.80 after the Wall Street Journal reported the second largest bike maker has shelved a project to develop a low-cost minicar in India for Renault SA and Nissan Motor Co, saying it was commercially unviable.
• Suzlon Energy was up 0.6% at Rs50.35 after the wind turbine maker said it had won a Rs650 crore 100 megawatt order from Orient Green Power Company.