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Business News/ Money / Morning: Markets trade choppy; Reliance gains, ITC drops
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Morning: Markets trade choppy; Reliance gains, ITC drops

Morning: Markets trade choppy; Reliance gains, ITC drops

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Mumbai: Indian shares were choppy on Wednesday as investor caution across Asia after a recent rally weighed on the market even as gains in energy giant Reliance Industries lent support.

Reliance, which has the most weight in the main index, rose 0.6% to Rs2,053 after India’s upstream regulator said on Tuesday the firm can raise gas supply to its peak rate faster than planned.

“Reliance is the company that is holding up the market today," said T S Harihar, vice president of ICICI Securities.

“People are realizing that Reliance is in a good position now," he added.

Other major gainers included outsourcer Infosys Technologies, which rose 2.1% to Rs2,085.90, and private-sector lender ICICI Bank that climbed 0.5% to Rs767.40.

But a slide in diversified cigarette maker ITC, HDFC Bank and top mortgage lender Housing Development Finance Corp weighed on the main index.

By 11:17am, the 30-share BSE index was down 0.1% at 15,813.26 points, with 20 stocks declining, after rising as much as 0.9% earlier. The 50-share NSE index was down 0.4% at 4,661.50.

The benchmark fell 0.6% on Tuesday as weak overseas markets encouraged investors to lock in profits after the market had jumped 17.5% over the previous three weeks.

The rally had been driven by strong domestic and global corporate earnings. The rally swelled gains to almost 97% from a 2009 low in March and 64% this year, stoking concerns about rich valuations.

Among major indices tracked by Reuters, only China’s and Indonesia’s benchmarks have performed better than India’s BSE index, which trades at 17.7 times one-year forward earnings. In contrast, benchmarks in other emerging markets such as Brazil, Indonesia and South Korea trade at a multiple of about 13, while Russia trades at 7.8 times.

The Indian market had discounted the earnings and big reforms would be needed to spur the market upwards, analysts said.

ITC fell 1.3% to Rs242.75, while HDFC Bank dropped 1.5% to Rs1,448.

Housing Development Finance Corp eased 0.8% to Rs2,479.90.

In the broader market, gainers led losers 1,184 to 1,065 on relatively heavy volume of 150 million shares.

Asian shares were lower on Wednesday, with Japan’s Nikkei down 0.9%, while MSCI’s measure of other Asian markets fell 0.8%.

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Published: 05 Aug 2009, 11:16 AM IST
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