Mumbai: India’s main share index seesawed on Thursday, a day after climbing past 17,000 points for the first time since May 2008, but Bharti rallied after its its proposed $24 billion deal with South Africa’s MTN collapsed, removing worries over a likely impact on earnings.
Energy giant Reliance Industries, engineering and construction firm Larsen & Toubro and top mortgage firm Housing Development Finance Corp were among the major losers.
“At least in the large caps, there is hardly anything that offers great value,” Sonam Udasi, vice president at BRICS Securities, said.
“The market is a bit stretched at present and there is a some consolidation, but it is healthy as the market will get a stronger base,” he added.
By 11:18am, the 30-share BSE index was flat at 17,135.68 points, with 16 stocks declining, after rising as much as 0.4% and falling 0.3% earlier. The 50-share NSE index was flat at 5,088.30.
Bharti Airtel jumped as much as 11.6% after the talks failed on Wednesday for the second time in just over a year on South Africa’s reluctance to allow a flagship corporate to lose its national character.
The stock later pared gains and was up 5.9% at Rs443.05.
“We had calculated that if the deal does not go through, the stock could go up to a price of Rs500 at the most,” Udasi said.
The broader market was weighed down by a surprise drop in manufacturing in the US heartland that raised concerns about the strength of a global recovery and pushed Asian stocks lower.
The BSE index has more than doubled from a 2009 low in early March and is up 77.5% this year, boosted by foreign portfolio inflows of more than $12 billion in the period, including $3.8 billion in 1-29 September.
But some analysts worry valuations are expensive and may temper future gains. Subdued monsoon rains -- crucial to the domestic-demand-led economy -- may also crimp corporate earnings growth.
The main index is likely to rise more than 2% by the end of 2009, a Reuters poll showed.
Reliance, which has the most weight in the main index, shed 1% to Rs2,179.
Housing Development Finance Corp eased 1.6% to Rs2,732, while Larsen dropped 0.8% to Rs1,670.
In the broader market, losers led gainers 1,261 to 1,135 on relatively heavy volume of 203.7 million shares.
Asian shares were lower, with Japan’s Nikkei down 1.6%, while MSCI’s measure of other Asian markets fell 0.5%.