Mumbai: Shares edged 0.1% higher on Monday, helped by gains in software majors, but Anil Ambani group companies declined after two group firms agreed with the market regulator to not invest in stocks until December 2012.
Software majors rebounded from the recent steep decline ahead of sector leader Tata Consultancy Services earnings expected after market hours.
A Reuters poll expects TCS to report a 22.1% rise in third-quarter net profit to Rs 2,194 crore.
The IT sector index, which is still down 4% year-to-date, closed 1.7% higher on Monday. TCS, Infosys Technologies and Wipro closed up between 0.7% and 2.1%.
The 30-share BSE index snapped a two-day decline and gained 0.12%, or 21.81 points, to 18,882.25 points in choppy trade, with 13 of its components gaining. The 50-share NSE index closed barely changed at 5,654.75 points.
Dealers said the sentiment was not yet bullish.
Foreign funds have been net sellers for seven sessions till Thursday. They have sold a net of $545 million for the year-to-date, with the benchmark index shedding nearly 8% in the period.
“FIIs (foreign institutional investors) have been pulling out some money off late due to a bunch of negative newsflow, including the scams and the parliament deadlock,” said Prasanth Prabhakaran, president of retail broking at IIFL.
“We should see the market returning back to sustainable gains once inflation is contained and (when) the reforms that are currently stalled, gain pace.”
Reliance Infrastructure fell as much as 10.6% to Rs 714, its lowest since May 2009. It closed 7.8% lower, while Reliance Power ended down 6.1%.
Other Anil Ambani Group companies such as Reliance Communications, Reliance MediaWorks and Reliance Broadcast Network closed down between 4.8% and 8.5%.
Late Friday, the Securities and Exchange Board of India said Reliance Natural Resources, which has been merged into Reliance Power, and Reliance Infrastructure shall not make investments in secondary market listed securities until December 2012 under a settlement reached with the regulator.
“It is a compromise settlement (by Anil Dhirubhai Ambani Group). Had they fought it out, it would have involved more time and the uncertainty and negative perception would have lasted longer,” Deven Choksey, managing director and CEO of K.R. Choksey Shares.
“That said, there will be some negative perception for now, leading to a correction and subsequent recovery thereafter.”
Larsen & Toubro ended down 1.7% after the engineering firm’s reported a fall in third-quarter operating margin, even as it beat forecasts with a 10.5% rise in quarterly net profit. [
Mortgage lender Housing Development Finance Corp gained 3.2%, after HSBC raised the stock to “overweight” from “neutral”, saying the recent correction in the stock offers an excellent entry point for investors. The stock is still down 9% year-to-date.
More than two shares declined in the broader market for every share that advanced in low volume trade of 246 million shares.
At 3:53pm, the MSCI world equity index was down 0.3%.
Carriers Kingfisher Airlines, Spicejet and Jet Airways fell between 1.4% and 5.3%, hurt by the fuel price hike.
Private lender Axis Bank gained 2.2% to Rs 1,227.55 after it said its December-quarter net profit rose by more than a third to Rs890 crore.