Mumbai: India’s main stock index met with resistance after climbing to its highest level in 25 months early on Tuesday, while export-driven outsourcers extended their drop on a strong rupee.
By 10:19am, the 30-share BSE index was up 0.04% at 17,942.24, with 14 of its components gaining, after hitting 17,988.89, its highest since 27 February, 2008.
The benchmark had risen 6.7% in March and is up 2.7% this year after jumping 81% in 2009.
“There is resistance as we are moving to higher levels,” said Kunal Sukhani, manager of institutional equities at Asian Markets Securities. “People are using this rally as an opportunity to book profits.”
Foreign funds have moved a net $4.7 billion into Indian stocks so far in 2010, with around $4.4 billion arriving in March. A part of these flows were absorbed by primary market offerings.
Outsourcers that get most of their revenue from exports were weighed down by the rupee that strengthened to 19-month-high against the dollar on Monday and looked to climb further, which could squeeze profit margins of the companies.
Top outsourcer Tata Consultancy Services was down 0.7% and rivals Infosys Technologies and Wipro dropped 0.8% and 0.7% respectively.
Tata Steel, the world’s eighth-largest steel maker by output, eased 0.3% after gaining more than 7% over the previous two sessions.
Sukhani said market participants were optimistic about March quarter corporate results that would start from next week.
“Nothing has changed. Overall, the scenario looks positive,” he said.
Financials edged higher on promising long-term outlook. Sector leader State Bank of India rose 0.1% and ICICI Bank climbed 0.5%.
Energy giant Reliance Industries, which has the highest weight on the Sensex, dipped 0.1% to Rs1,124.35. Engineering and construction firm Jaiprakash Associates dropped 0.9% after rising more than 3% over two sessions.
In the broader market, gainers were nearly double the number of losers on volume of 133 million shares. The 50-share NSE index was down 0.1% at 5,362.65.