New Delhi: Shares closed 0.2% lower on Monday as investors locked in some gains, riding on an early rise in a market that had hit a six-week closing high last week, with little direction coming from world markets ahead of the year end.
Metal producer Sterlite Industries, top mobile phone operator Bharti Airtel and India’s most valuable firm Reliance Industries led the losses.
Shares in billionaire Anil Ambani’s Reliance Communications closed down 3.6% at Rs136.85, after elder brother Mukesh Ambani’s Reliance Industries on Friday denied market talk it was planning to invest in India’s No. 2 mobile operator.
Reliance Comm stock had risen 10.5% on Friday, helped by the market rumour.
The 30-share main BSE index closed down 0.22%, or 44.73 points, at 20,028.93, with 19 of its components falling. The index had risen as much as 0.6% in early trade.
“The problem is there is not much volume in the markets, with the foreign institutional investors segment on a holiday. And when the European markets opened with a downtick, some selling pressure came in our markets as well,” said Rajesh Agarwal, head of research at Eastern Financiers.
“The market is stuck in a range. There could be some stock-specific action but the overall market is going to stay like that at least for the next five-six sessions,” Agarwal said, referring to the holiday season.
However, he added there was no reason to expect a big fall in stocks.
The main index is up about 15% so far this year on robust foreign fund inflow into Indian equities that stands at $28.4 billion, set to be the highest yearly inflow.
A strong growth outlook for India, making it an attractive investment destination, has most market players upbeat about the outlook for domestic equities in 2011.
“People are expecting next year’s allocation to India to be higher, with specific sectors such as banks and infrastructure benefitting” said Gajendra Nagpal, chief executive of Unicon Financial Intermediaries.
On Monday, dealers said metal producers declined as base metal prices were pressured after China’s central bank raised interest rates over the weekend in an effort to curb inflation.
Sterlite shares fell 3% to Rs179.25, while Hindalco lost nearly 1%, and Tata Steel fell 1.4%.
Bharti Airtel lost 2% to close at Rs341.60. Reliance Industries, which accounts for a weightage of nearly 12% in the main index, closed 0.4% lower at Rs1,055.10.
In the broader market, 1,494 gainers were marginally ahead of 1,442 losers on relatively lower volume of 286 million shares.
The 50-share NSE index closed 0.2% down at 5,998.10 points.
Chinese shares slid and European stocks followed suit on Monday as the impact of China’s Christmas Day interest rate rise sunk in to thin markets.
The MSCI’s measure of Asian markets other than Japan was little changed, while Japan’s Nikkei rose 0.8%. By 04:20 pm, European shares were down 0.7% and the MSCI world equity index was trading 0.04% lower.