Noon: Markets flip-flop; ICICI falls, Reliance up

Noon: Markets flip-flop; ICICI falls, Reliance up
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First Published: Thu, Jul 09 2009. 12 34 PM IST
Updated: Thu, Jul 09 2009. 12 34 PM IST
New Delhi: Indian shares seesawed on Thursday as investors waited for quarterly earnings amid renewed doubts about the prospects for a swift global economic recovery and the outlook for fund flows.
The IMF forecast a slightly steeper 1.4% global contraction in its latest outlook than in the April projection though it said the global economy would slowly pull out from its worst recession in six decades.
Infosys Technologies, which is forecast to report a 13% fall in quarterly profit from January-March, was down 0.2% at Rs1,701.95.
The outsourcing bellwether is mainly driven by exports, but many companies that depend on the domestic market are expected to report better results, traders said.
“There is a perception that things have improved in the last quarter in terms of demand. So if there is any disappointment you will see another sell-off happening,” said Neeraj Dewan, director at Quantum Securities.
By 12:42pm, the main 30-share BSE index was down 0.06%, or 7.76 points at 13,761.39, with half of the components falling. The 50-share NSE index was up 0.04% at 4,080.60.
The benchmark, which dropped 2.8% on Wednesday, has lost nearly 8% this week after the budget on Monday disappointed investors. Still, it is up 42% this year after rallying for 16 of the last 17 weeks.
However, there are concerns robust foreign fund inflows, which had lifted the stock 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 in 2009.
“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 percent,” Dewan said.
Shares in Reliance Industries were up 1.9% at Rs1,863.35, after falling 1.4% in the previous session. The stock accounts for more than 14% of the weightage in the main index.
Among financials, ICICI Bank fell 2.7% to Rs636.75 on concerns about its international units as a global recovery would take time, while State Bank of India rose 1.2% to Rs1,605.90.
The wholesale price index fell 1.55% in the 12 months to 27 June, a fourth straight fall, data showed. However, analysts and policy makers have attributed the fall mainly to statistical base effect and not to demand contraction.
In the broader market, 1,390 losers were ahead of 922 gainers on relatively light volume of 191 million shares.
Asian stock markets remained mostly weaker, with Japan’s Nikkei Average losing more than 1%, while MSCI’s measure of other stocks in the region barely moved.
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First Published: Thu, Jul 09 2009. 12 34 PM IST
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