Mumbai: Shares reversed early gains and shed 0.2% on Wednesday, halting a three-session rally as traders opted to book profits.
Trade remained choppy amid subdued volumes as the year-end closed in, but investors were optimistic about the outlook for 2011 on the back of strong economic growth.
Financials led the decline, with the banking sector index <.BSEBANK> dropping 0.6% after rising 2.3% in the previous session, as traders locked in gains.
Top car maker Maruti Suzuki <MRTI.BO> erased 2.1% as its chief executive said the plant was likely to roll out less units in December than in the previous month owing to a seasonal maintenance shutdown. [ID:nSGE6BL05I]
The 30-share BSE index <.BSESN> fell 0.22% or 44.52 points to 20,015.80, with half of its components losing ground.
Advance-decline ratio for the broader market was at 1.1 to 1, in a low volume of 330 million shares.
“Market was expected to be choppy after the rise we saw in recent sessions,” said Sunder Subramaniam, senior manager of institutional sales at brokerage Sharekhan.
“Also, FII (foreign institutional investors) activity is generally low around the year end.”
Foreign funds inflows into Indian equities, which tend to peter out towards the year end, have totalled $28.5 billion so far in 2010, aiding the benchmark index gain around 14.6%. [INFII]
Ispat Industries <ISPT.BO> gained 11.3% after JSW Steel <JSTL.BO> made an open offer to acquire upto 20% stake in the firm at 20.54 rupees a share, making it the most traded main stock. The stock had shed 15% on Tuesday. [ID:nBMB012091]
JSW Steel dropped 0.8%.
“We are reasonably positive on the market outlook in 2011,” ICICI Securities said in a note on Tuesday, adding it expected the Sensex to touch 23,700 points by end-2011.
The brokerage said it expected corporate earnings to be strong given the robust economic growth and favourable monsoons this year.
Leading private lenders ICICI Bank <ICBK.BO> and HDFC Bank <HDBK.BO> dropped 0.7% and 1.5%. Top lender State Bank of India <SBI.BO> bucked the trend and edged 0.1% higher.
Energy giant Reliance Industries, which has the highest weight on the main index, shed 1.3% due to a lack of any immediate positive triggers, dealers said. The stock is down 3% on the year.
Telecom stocks rebounded after the recent decline. Top mobile operator Bharti Airtel gained 3.1% after declining equal%age points over the two previous sessions.
Second-largest mobile operator Reliance Communications firmed 0.8%, but is still down nearly 3% on the month.
State-run oil marketing companies gained on expectations of higher diesel and cooking gas prices after a ministerial meeting, due likely by end-December, which would help cushion oil retailers from rising global crude prices.
Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp gained between 0.7% and 1.6%.
The 50-share NSE index shed 0.3% at 5,984.40 points.
By 1030 GMT, the MSCI world equity index was steady and Thomson Reuters global stock index edged 0.1% higher.
Metal producers rallied as base metal prices rallied in key international markets.
Non-ferrous metals producer Sterlite Industries rose 1.2% while aluminium producer Hindalco climbed 1.9%.
State-run explorer Oil and Natural Gas Corp (ONGC) rose 0.2% to Rs 1,304.35 after it took a big step towards strengthening its foothold in Russia, signing an agreement with Russian holding company Sistema late Tuesday.
NHPC firmed 2.4% to Rs 28.10, after the state-run utility said it had signed a joint-venture agreement with Jammu & Kashmir State Power Development Corp and PTC India to generate 2,100 megawatt of hydro-electricity.