Mumbai: Indian shares erased gains of as much as 1.6% and turned negative on Tuesday afternoon following a retreat by European peers.
At 1:47pm, the 30-share BSE index was down 0.7% at 15,550.55 points, with 21 stocks declining. The 50-share NSE index was down 0.7% at 4,631.30.
Markets rose 1.3% in the noon, supported by firm Asian peers and as long-term investors looked to enter the market after it fell 1.6% in the previous session.
State-run hydropower generator NHPC Ltd was up 4.2% at Rs37.50 on its debut. The utility’s IPO for up to $1.25 billion was subscribed more than 20 times and was priced at Rs36 per share, the top end of the indicated band.
“India is looking to other markets for support. There are no real domestic triggers to move the market,” Arun Kejriwal, a strategist at research firm KRIS, said.
“A lot will depend on how European markets open today and NHPC performs in the afternoon. Right now, NHPC is a bit of a disappointment as expectations had been sky high,” he said.
Private-sector lender ICICI Bank rose 2.9% to Rs771 and No. 2 outsourcer Infosys Technologies advanced 2.1% to Rs2,176.50 to lead gains in the main index.
Energy giant Reliance Industries, which has the most weight in the main index, climbed 0.9% to Rs2,023.
Top telecoms firm Bharti Airtel, which is in exclusive merger talks with South Africa’s MTN, added 0.8% to Rs428.20.
Non-ferrous metals producer Sterlite Industries fell as much as 2.8%, but trimmed losses to trade down 0.1% at Rs674.50 as London copper futures pared early declines.
A US federal judge recommended Mexican miner Grupo Mexico’s bid to take control of US copper miner Asarco LLC. Sterlite had made a bid for the miner as it emerges from bankruptcy.
Judge Richard Schmidt of the US Bankruptcy Court in Corpus Christi, Texas, said Grupo Mexico’s was the better of two plans, as it was more likely to pay Asarco’s creditors in full.
Analysts have said investors were not pricing in a possible acquisition of Arasco into Sterlite’s stock, and so the latest court ruling was not expected to significantly impact the Indian firm’s shares.
“The recommendation of the US Bankruptcy Court, which in our view is not binding but is expected to provide guidance, would now move to US District Court Judge for final confirmation,” JPMorgan analyst Pinakin Parekh said.
“We are currently not building in Asarco into our financials,” said Parekh, who has an “overweight” rating on Sterlite’s stock.
By 11:55am, the 30-share BSE index was up 1.3% at 15,876.36 points, with 27 stocks advancing.
On Monday, the benchmark had fallen for the first time in seven days as equity markets worldwide slid on profit-taking after a recent rally.
Analysts say a rush of liquidity pouring into emerging markets will support stocks in the near term as investors look to buy on dips even though worries about a weak monsoon, high valuations and looming inflation weigh.
Drought has affected 278 Indian districts, increasing its spread despite higher rainfall in the past two weeks and making the rising prices of sugar and lentils the big worry for the country, the government said on Monday.
Indian manufacturing activity expanded at its slowest pace in five months in August as companies struggled to raise selling prices despite higher costs, a survey showed on Tuesday.
India’s economy grew 6.1% in the June quarter from a year earlier, roughly in line with forecasts as government stimulus helped spur demand, but the poor monsoon threatens to erode growth later in the year even as it drives prices higher.
In the broader market, gainers led losers by almost 3 to 1 on relatively heavy volume of 327.8 million shares.