New Delhi: The BSE Sensex was little changed on Thursday in choppy trading as investors awaited direction from quarterly earnings amid doubts about the prospects for a swift world recovery and the outlook for fund flows.
Export-focused outsourcer Infosys Technologies, which kicks off the earnings parade on Friday, is forecast to report quarterly profit fell 13% from January-March, but many companies that depend on the domestic market are expected to post better results, traders said.
“We expect markets in India to react positively to the upcoming earnings season as it is likely to lay the foundations for a much stronger growth rate in profits in the second half of the year,” Nomura analysts said in a strategy report on Thursday.
The main 30-share BSE index closed 0.08%, or 11.69 points, lower at 13,757.46, with half of the components falling. It flip-flopped through the session, dropping as much as 0.9% and rising 0.8%. The 50-share NSE index rose 0.05% to 4,080.95.
The benchmark has lost 7.7% this week after the budget on Monday disappointed investors, but is up 42.6% this year after rallying for 16 of the last 17 weeks.
Infosys, the country’s second-largest outsourcer, fell 1.7% to Rs1,676.75. Investors will be focusing on the outlook the company releases with the results.
Shares in Reliance Industries rose 1.3% to Rs1,852.35, contributing most to the index’s gain, after falling 1.4% in the previous session. The stock has the heaviest, more than 14%, weightage in the main index.
Among financials, ICICI Bank fell 2.8% to Rs636.45, on concerns about its international units as a global recovery would take time, but State Bank of India rose 0.9% to Rs1,601.95.
There are concerns robust foreign fund inflows, which had lifted the BSE index by nearly half in the June quarter, could slow down sharply and even reverse if there was more pain for the world economy.
The funds have poured in $5.8 billion so far this year after pulling out more than $13 billion in 2008, when the index more than halved.
“They are the ones who started the rally and are sitting on profits. It is possible that they will book profits if something bad happens, which has the capacity to hit the markets by 10 to 15%,” said Neeraj Dewan, director at Quantum Securities.
The International Monetary Fund forecast a slightly steeper 1.4% global contraction in its latest outlook than in the April, though it said the global economy would slowly pull out from its worst recession in six decades.
Data showed India’s wholesale price index fell 1.55% in the 12 months to 27 June, a fourth straight fall. Analysts and policy makers have attributed the drop mainly to statistical base effect and not to demand contraction.
In the broader market, 1,478 losers outnumbered 1,091 gainers on moderate volume of 366 million shares.