Mumbai: Indian shares ended little changed after a choppy trading session on Thursday, as resistance emerged after the market rallied 6.5% over the previous five days.
Short-covering on the final day of derivatives expiry limited losses and helped the BSE 30-share index close at its best level in just over three weeks.
Tata Steel, the world’s No. 8 steel maker, dropped 5.1% to Rs436.40 as it posted a consolidated June quarter loss as poor demand at its European unit Corus and lower steel prices weighed on earnings.
Among the major losers were private-sector lender ICICI Bank, which eased 1.4% to Rs750.80, consumer-goods firm Hindustan Unilever, which fell 2.3% to Rs256.65, and leading vehicle maker Tata Motors that fell 2.6% to Rs485.95.
Top Indian telecom firm Bharti Airtel, which is in exclusive merger talks with South Africa’s MTN, climbed 2.7% to Rs416.50.
Bharti and MTN hope to finalize by mid-September a deal that could lead to a full merger, with the Indian firm adding another adviser and getting closer to lining up loans, three sources told Reuters.
Engineering and construction firm Larsen & Toubro, which advanced 1.6% to Rs1,599.85, and top power equipment maker Bharat Heavy Electricals that rose 1.3% to Rs2,329 were the other major gainers.
“After the market rallied over the past five days, it’s starting to quieten a bit now,” Avinash Gupta, assistant vice president of equity research at Bonanza Portfolio, said.
“The market is giving signals of consolidation, and there are no domestic triggers to take it up in the near term.”
The BSE Sensex ended up 0.07%, or 11.22 points, at 15,781.07, its best close since 5 August. Gainers and losers were evenly matched.
Trading was choppy, with the benchmark falling as much as 0.5% and rising 0.5% at one stage.
The benchmark has now risen 0.7% in August, after it fell earlier in the month on worries about a weak monsoon, high valuations and looming inflation.
Encouraging global economic data and a rally across equity markets worldwide has also supported the main index over the past few sessions.
However, having already priced in an upturn in the global economy, investors are looking for more signs that growth can be sustained once the impact of massive global government stimulus spending fades, traders say.
There are also worries stocks may have moved ahead of economic fundamentals and may be due for a correction.
“Definitely the market momentum has come down, and if the liquidity coming into the market dries up, we could see more of a fall,” Gajendra Nagpal, chief executive of Unicon Financial Intermediaries, said.
India’s monsoon rainfall deficit in the 1 June -26 August period was 25%, two government sources told Reuters on Thursday.
India’s deficient monsoons may affect the inflation outlook more than growth prospects, the central bank said on Thursday, adding that prolonged expansionary fiscal and monetary policies threatened to push up prices and eventually crimp growth.
Data showed on Wednesday that Indian food prices surged an annual 13.3% in mid-August even as the overall wholesale price index fell, and the impact of the poor monsoon on inflation and the economy could prompt further government relief steps.
In the broader market on Thursday, gainers led losers 1,659 to 1,133 on above-average volume of 539.5 million shares.
The 50-share NSE index rose 0.2% to 4,688.20.
Asian shares were lower, with Japan’s Nikkei falling 1.6%, while MSCI’s measure of other Asian markets was down 0.5%.
At 1050 GMT, the FTSEurofirst 300 of top European shares was down 0.3%.