Mumbai: Indian shares fell nearly 1% on Monday morning after a weak lead-in from Asian markets, with technology and bank stocks leading the losses.
Infosys Technologies was down 1.9% at Rs2,524.90 and Tata Consultancy Services shed 1.3% to Rs745.65.
“IT stocks are just adjusting after the sharp run-up we saw post Infosys and TCS results,” said Vaibhav Sanghavi, director of Ambit Capital, who recommended buying tech stocks.
Both Infosys and Tata Consultancy had hit record highs this month after reporting better-than-expected December quarter results, and were still up 1.5% and 4.4% respectively since before Infosys reported on 12 January.
Top carmaker Maruti Suzuki was up 1% at Rs1,454 after it reported on Saturday December quarter profit more than tripled.
Domestic brokerage Prabhudas Lilladher revised its EPS estimate for Maruti Suzuki fiscal 2010 and fiscal 2011 upwards by 6% and 8% respectively after results.
At 10:22am, the 30-share BSE Index was down 0.87% at 16,712.18, with only six of its components gaining, and on track for a fifth straight daily fall. The 50-share NSE index was down 0.9% at 4,990.90.
“I don’t think anything really has changed for India in terms of fundamentals. It is just reacting to the weakness in global markets and some bad results last week from the capital goods sector,” said Sanghavi.
“The India story still holds good, and the fund flow in the country should continue,” he added.
The Reserve Bank of India reviews key interest rates in its quarterly policy meeting on 29 January, and banks edged down ahead of an expected tightening in their reserve requirements.
According to a Reuters poll, 24 out of 25 economists expected the central bank to raise the cash reserve ratio, the proportion of deposits banks need to keep with the central bank, by up to 50 basis points in the meeting.
Private lenders HDFC Bank and ICICI Bank were down 2.5% and 1.6% respectively.
Sector leader State Bank of India bucked the trend and was up 0.4% at 2,097.90 rupees ahead of its quarterly results. It is forecast to post a 1.1% decline in its quarterly net profit on sluggish credit demand and a fall in treasury incomes as bond yields rose.
In the broader market, gainers led losers in a ratio of 1.6:1 in a volume of 119 million shares.