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Sensex ends 257 pts down on profit-booking

Sensex ends 257 pts down on profit-booking
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First Published: Thu, Jun 18 2009. 04 56 PM IST
Updated: Thu, Jun 18 2009. 04 56 PM IST
Mumbai: Indian shares fell 1.8% on Thursday, dropping for the fifth session in six, as profit-taking picked up momentum on market talk the cash-strapped government may roll back tax breaks for some sectors.
The ruling coalition, which was re-elected with a stronger mandate in May, is scheduled to present its annual budget on 6 July. The victory had initially sparked expectations the government would pursue investor-friendly measures to boost growth.
“Investors are worried the budget won’t bring the pleasant tidings they thought it will,” Arun Kejriwal, a strategist at research firm KRIS, said.
“People are realising all the expectations from the budget could turn out to be hogwash.”
Tata Steel and JSW Steel, and cement makers ACC Ltd and Ambuja Cements were hammered on speculation the government may roll back excise duty cuts announced in February to boost demand, traders said.
Energy giant Reliance Industries extended losses for a fourth session, falling as much as 2.9%, following an unfavourable court ruling on gas supplies.
Profit-takers also targeted engineering and construction firm Larsen & Toubro and state-run explorer Oil and Gas Natural Corp.
The 30-share BSE index ended down 1.77%, or 257.31 points, at 14,265.53, after falling as much as 2.3% and rising 0.7% at one stage. It was the lowest close in three weeks. The 50-share NSE index fell 2.4% to 4,251.40.
The benchmark has dropped 5.4% since last Wednesday after soaring 77.3% from a 2009 low in early March, and traders said the pull back was a healthy sign for the longer run.
“Whatever correction is happening is for the good because the market was on a one-way ticket to the moon,” V K Sharma, head of research at Anagram Stock Broking, said.
The long-term outlook for the market remains firmly upbeat, he said. “Those with a one-year horizon, should be buying on these dips.”
Outsourcer Infosys Technologies rose 0.6% to 1, Rs721.45, while government-run lender State Bank of India gained 2.3% to Rs1,702.20.
India’s wholesale price index fell in early June on an annual basis for the first time in at least three decades, but analysts said this did not signal a weakening economy and would not prod the central bank to cut rates further.
Twenty-three components in the main index declined, while in the broader market, losers led gainers by almost 4 to 1 on relatively heavy volume of 508.8 million shares.
Reliance slid 1.3% to Rs2,024.95, extending losses over four sessions to 14%. Larsen fell 3.5% to Rs1,415.30, while ONGC dropped 4.9% to Rs1,012.40.
ACC slumped 8.3% to Rs758.35, while Ambuja shed 6.8% to Rs89.60. Tata Steel ended down 6.7% at Rs389 and JSW Steel dropped 9.3% to Rs573.45.
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First Published: Thu, Jun 18 2009. 04 56 PM IST
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