Mumbai: Indian shares fell more than 1% by Monday afternoon, erasing earlier gains of as much as 1.7%, as investors took profits after the market rose a third over the past six weeks.
By 2:47pm, the 30-share BSE index was down 1% at 10,912.20 points, with 21 stocks declining. It fell as much as 1.1% at one stage, with diversified cigarette maker ITC and private-sector lender ICICI Bank leading the losses.
The 50-share NSE index was down 1% at 3,351.10.
Traders had expected the market to consolidate after rising a third over the past six weeks, but buying in energy firm Reliance Industries and financials such as ICICI Bank, State Bank of India and HDFC Bank underpinned the rise.
“This is typically a fight between the bulls and the bears. Valuations looked stretched at the moment and so the bias should be negative, but the market is not going down because no one is ready to trigger a fall,” Gajendra Nagpal, CEO of New Delhi-based Unicon Financial Intermediaries, said.
By 12:39pm, the 30-share BSE index was up 31.68 points at 11,054.77 and the 50-share NSE Nifty was at 3,392.20, 7.80 points higher.
The benchmark had risen a third over six weeks ended Friday as foreign funds poured in about $1.4 billion since mid-March.
“The market is struggling to break out on either side. It is facing resistance at 11,300 to 11,400 levels,” Hitesh Agrawal, head of research at Angel Stock Broking, said.
“There needs to be a correction of 1,200 to 1,500 points to attract fresh money into the market. I feel we will be able to stretch only about 200 to 300 points on the upside in the short term,” he said.
Political uncertainties are also expected to dent investor confidence with the country in the midst of a general election that began last week and ends on 13 May, traders said.
Reliance Industries, India’s largest-listed firm with the biggest weight in the main index, rose 1.4% to Rs1,740.75.
Private-sector lender ICICI Bank gained 1.9% to Rs449.85, while rival HDFC Bank rose 1.8% to Rs1,087.90. Government-run State Bank of India jumped 1.9% to Rs1,331.
In the broader section, advancers led losers in the ratio of almost 3:1 on light volume of 133.1 million shares.
Asian stocks edged up, holding near a six-month peak struck last week after withstanding an early bout of profit-taking. Japan’s Nikkei was up 0.2%, while MSCI’s measure of other Asian markets rose 0.5%.