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Markets ease after hitting new 32-month high

Markets ease after hitting new 32-month high
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First Published: Wed, Sep 22 2010. 11 36 AM IST
Updated: Wed, Sep 22 2010. 11 36 AM IST
Mumbai: Indian shares ran out of steam after climbing to 32-month highs for the eighth successive session on Wednesday, strengthening the case for consolidation following an 11 percent rally over three weeks.
Outsourcers such as Tata Consultancy Services and Infosys Technologies shed around 1% each as investors locked in profits after the two stocks had hit record highs in the previous session.
Sun Pharmaceutical rose as much as 3.1% to an all-time high of Rs1,984.70 after the top valued drugmaker said it had completed the acquisition of a controlling stake in Taro Pharmaceutical Industries Ltd.
By 11:35am, the 30-share BSE index was down 0.28% at 19,945.37 points, with 13 of its components declining. It had risen as much as 0.5% early to 20,105.54 -- its highest since January 2008.
The software services sector index was down 0.7% after rising 3% over three sessions.
“People are booking profits after the sharp rally we saw in very less time,” said Mihir Mehta, assistant vice-president of institutional sales at brokers Asit C. Mehta. “Investors need to be cautious and we can see some consolidation happening.”
The rally has been boosted by foreign fund inflows of $3.3 billion this month. Net foreign investment in stocks have risen to more than $16 billion so far in 2010, on course to probably exceed last year’s record $17.5 billion inflow.
The buying has lifted the BSE index 14.3% in the year to date, making the benchmark the best performer among its peers in Brazil, Russia and China.
Top engineering and construction firm Larsen & Toubro shed 1.4%, trimming gains to nearly 11% in September.
Automakers raced ahead, led by top Maruti Suzuki that rallied as much as 3.3% after Bank of America-Merrill Lynch upgraded the stock to buy from underperform. Expectations for good demand in the approaching festive season also kept the sentiment upbeat for auto stocks, dealers said.
Mahindra & Mahindra and Tata Motors were up 2.4% at 0.5% respectively. Leading motorcycle maker Hero Honda bucked the trend and fell as much as 2.3% after UBS said it had lowered the stock to neutral from buy.
In the broader market, losers beat gainers in a ratio of 1.6:1 while 190 million shares changed hands on the BSE.
The 50-share NSE index was down 0.4% at 5,987.30.
Elsewhere, the MSCI’s measure of Asian markets other than Japan was up 0.6%, while Japan’s Nikkei dropped 0.4%.
STOCKS
Mahindra Satyam rose 4.7% to Rs99.70, adding to gains of more than 7% on Tuesday as investors looked forward to the audited financial results review on 29 September, which analysts say will take it closer to a merger with parent Tech Mahindra. Tech Mahindra was up 2.9% at Rs749.25.
Nitin Fire Protection Industries was up 1.1% at Rs315.15, after the company said it had acquired management control of Dubai-based New Age Company LLC along with 80% profit sharing.
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First Published: Wed, Sep 22 2010. 11 36 AM IST
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