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Shares drop 0.4%; Tata Motors at 20-year high

Shares drop 0.4%; Tata Motors at 20-year high
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First Published: Tue, Aug 10 2010. 05 36 PM IST
Updated: Tue, Aug 10 2010. 05 36 PM IST
Mumbai: Shares shed 0.4% on Tuesday with software companies leading the fall, dragged down by weak world equities on caution ahead of the US Federal Reserve’s meeting, but dealers ruled out a bearish sentiment.
There has been growing speculation that the US central bank will signal a need for more stimulus to support growth or possibly restart asset purchases, as data since the Fed’s last policy-setting meeting in late June had been weak.
Tata Motors bucked the trend and raced to a 20-year high on higher sales and improved profitability of its Jaguar and Land Rover unit.
The stock rose as much as 5.3% to Rs967.30, its highest in at least 20 years, data from Thomson Reuters showed.
It closed 4.2% higher at Rs957.30.
The BSE 30-share index Sensex dropped 0.37% or 67.51 points to 18,219.99, with 19 of its components closing in the red.
“The outlook for the market for the rest of year is definitely positive, backed by expectations on economic growth and earnings growth,” said Sandip Sabharwal, chief executive of portfolio management services at Prabhudas Lilladher.
“Trouble is not over for Europe and other economies and they are bound to be on a slow growth path for a while. So, emerging economies like India will continue to attract flows.”
The benchmark index is up 4.3% so far this year with foreign funds investing a net of $11.2 billion in Indian equities including primary market offerings. They had pumped in a record $17.5 billion in 2009, helping the index rally 81%.
Export-oriented software companies shed the most, with the sector index declining 1.4%, after their recent rally. The sector index is still up 2.1% so far in August.
Infosys Technologies CEO S. Gopalakrishnan told reporters late Monday the cost from US plans to hike visa application fees on some technology firms operating in the United States would over time be passed on to customers as it was an industry-wide issue.
Top outsourcer Tata Consultancy Services dropped 1.6% while Infosys and Wipro dropped 1.4% and 2.1% respectively.
Financials closed mixed. Top lender State Bank of India dropped 0.7% while its nearest rival ICICI Bank firmed 0.9%.
Mahindra and Mahindra shed 1.5%, after Yonhap news agency reported India’s top utility vehicle maker is one of the three parties that have made binding offers to buy troubled South Korean car maker Ssangyong Motor Co Ltd.
Declining shares thrashed advancing ones in the ratio of 1.3:1 in the broader market, in a relatively moderate volume of 441 million shares.
The NSE 50-share index Nifty declined 0.5% to 5,460.70 points.
Elsewhere, MSCI’s world equity index was down 0.7% by 1037 GMT while its more volatile emerging markets index shed nearly 1%.
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First Published: Tue, Aug 10 2010. 05 36 PM IST
More Topics: Stocks | Shares | Sensex | Nifty | BSE |