Mumbai: Shares turned negative, weighed down by financials as leading lender State Bank of India tumbled nearly 4% after it said it will hike deposit rates.
At 3:17pm, the 30-share BSE index was down 0.03% at 19,961.51 points, with 12 components declining. The 50-share NSE index was down 0.1% at 5,988.40.
Markets climbed to three-week highs in the day as a rapidly growing domestic economy continued to attract investors. Firm Asian equities also underpinned sentiment.
Tata Steel surged 3.7% after global miner Rio Tinto made a $3.5 billion bid approach for Africa-focused Riversdale Mining, in which the Indian steelmaker was one of three major owners.
RBS Equities, which has a buy rating on Tata Steel, said the event was a positive development for the steelmaker.
Top motorcycle maker Hero Honda bucked the trend and dropped as much as 4.8% following a newspaper report on the weekend Japan’s Honda Motor may sell its holding in the joint venture.
By 11:05am, the 30-share BSE Index was trading up 0.94% at 20,154.66, with 26 of its components gaining. The 50-share NSE index was up 0.9% at 6,045.45. The 50-share NSE index was up 0.9% at 6,045.45.
The benchmark, which had rallied 4.3% last week on the back of upbeat economic growth data, hit 20,183.41 in early trade, its highest level since Nov. 16.
It was the first weekly gain in four after the market was roiled by a series of scandals, including a bribes-for-loan scam.
“Despite the recent scandals that rocked our country, FIIs did not exit India, which shows their confidence in Indian equities,” Gajendra Nagpal, CEO of Unicon Financial, said referring foreign institutional investors.
Data from Nomura showed Indian equities were the second-most preferred investment destination for foreign funds after Japan in the last week, among seven countries in the continent.
Foreign buying of Indian equities stand at a record $29.2 billion so far this year, according to the Securities and Exchange Board of India.
India’s economy had expanded 8.9% in the September quarter, quicker than expected by economists, and a private survey last week showed manufacturing activity in November grew at its fastest pace in six months.
Nagpal said he expected the market to consolidate as the year wound down. “I do not think the market will rise significantly from this point until the year end,” said
Energy major Reliance Industries climbed 1.3%, catching up with the rally in the broader market after being a laggard this year. The stock is still down 6.4% in 2010.
Jindal Steel & Power was up 2.7% after it said on Friday its 2,400 megawatt coal-based power project was recommended for environmental clearance.
In the broader market, gainers were 2.5 times the number of losers on volume of 113 million shares.
Suzlon Energy was up 3.2% at 53.35 rupees after the wind turbine maker said it would acquire two wholly owned units to reduce costs, improve material management and improve operations.
RPP Infra Projects, a builder of roads and bridges, was trading down at Rs72.60 after listing at its IPO price of Rs75.