Mumbai: Indian shares posted their fifth consecutive quarterly rise with a modest 0.4% gain, and market participants ruled out a steep fall in equities in the June quarter.
Great expectations: On Wednesday, the Sensex closed 0.35%, or 62.40 points, lower at 17,527.77 points. HT
However, in the March quarter, the 30-share main index, the Sensex, is likely to underperform the MSCI All-Country World Index and emerging markets index, which were set to notch decent gains. As of 1156 GMT, they were up 2.7% and 2% respectively so far in the quarter.
In the region, the MSCI’s measure of Asian markets other than Japan was up 2.2% so far in the quarter.
On Wednesday, the Sensex closed 0.35%, or 62.40 points, lower at 17,527.77 points, with 17 components losing.
It has rallied more than 80% in the fiscal year to March. It gained 6.7% in March, its best monthly performance since September 2009.
Foreign funds have poured in around $4 billion in Indian stocks this year, most of which came in the current month.
The March rally was helped by the national budget unveiled late last month, which pushed for fiscal consolidation and higher consumption, and on optimism about corporate earnings and economic growth.
“Growth optimism is built in the price. People will now look for deliveries of those expectations,” said Ved Prakash Chaturvedi, managing director of Tata Asset Management.
He said a steep downside in the stock market was unlikely in the coming quarter. “The underlying sentiment will be that of optimism, but depending on how the global factors and interest rates play out, we could see some volatility.”
Chaturvedi expects the consumption, global outsourcing and infrastructure theme to play out in the Indian market in the June quarter.
Five out of nine respondents to a Reuters Asset Allocation Poll conducted between March 23 and March 30 said the country’s benchmark stock index could rise further in the next three months.
Drug maker Sun Pharmaceuticals Ltd was the top gainer this quarter with a nearly 19 % gain, while top-listed real estate firm DLF Ltd shed the most with a 14.5% fall.
On Wednesday, Indian stocks were weighed down by weakness in their Asian peers.
Export-driven outsourcers continued to reel under pressure on concerns their margins would be hit by a rising rupee.
The rupee rose 2.7% in March, its biggest gain in a month since May 2009 and is up 3.7% over the quarter.
Leading software companies Tata Consultancy Services Ltd and Infosys Technologies Ltd dropped 2.5% and 1.1%, respectively. However, Wipro Ltd rose 0.6 %.
Bharti Airtel Ltd rose as much as 2.7% after the top mobile operator clinched a deal late on Tuesday to buy most of the African operations of Kuwait’s Zain for $9 billion.
“Africa is the next region set for industrial growth. It is all about getting hold of an asset when an opportunity arises,” said Sandeep Sabharwal, CEO of portfolio management services at brokerage Prabhudas Lilladher.
However, concerns of crowding in the domestic market and price wars will continue to weigh on Bharti’s margins in the near term, he said.
The stock erased some early gains and closed 0.3% higher.
Energy giant Reliance Industries Ltd, which has the highest weight on the Sensex, declined 1.2%. In the broader market, gainers led losers in a ratio of 1.3:1 on a volume of 335 million shares, lower than the volume on Tuesday.
The 50-share NSE index closed 0.3% lower at 5,249.10 points.
Anurag Joshi contributed to this story.