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Profit-taking emerges as Sensex tops 20,000

Profit-taking emerges as Sensex tops 20,000
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First Published: Tue, Sep 21 2010. 12 53 PM IST
Updated: Tue, Sep 21 2010. 12 53 PM IST
Mumbai: The BSE Sensex shot past 20,000 points on Tuesday for the first time in 32 months, boosted by rising foreign fund investments in the rapidly expanding economy.
But the rally, which has driven the BSE Sensex up nearly 11% so far in September, triggered profit-taking and shares were trading off their highs.
HDFC Bank, the country’s No. 2 private-sector lender, climbed to an all-time high.
At 11:37am, the 30-share BSE Sensex was up 0.37% at 19,979.62 points, with 17 of its components advancing. It had risen 0.9% in early trade to 20,088.96, its highest since January 2008. The 50-share NSE index was up 0.4% at 6,002.25 points.
“What worries me is the speed at which it is moving up. All those who think they have missed out on the rally are rushing in,” said Sandip Sabharwal, CEO of portfolio management services at brokerage Prabhudas Lilladher.
He said the market was ripe for consolidation, but the undertone remained bullish.
In the broader market, declining shares outpaced gainers in the ratio of 2.7:1, while turnover was high at 224 million shares.
Foreigners have moved nearly $3 billion into Indian equities in September, taking the net inflow to $15.8 billion in 2010. The BSE index is up more than 14% in the year to date.
Analysts are upbeat about the outlook for inflows, especially because of the robust growth forecast for emerging economies such as India while the developed world battles a slowdown.
“We believe the potential for further fund inflow into India is significant, as global funds are just about beginning to increase their allocation to India,” BNP Paribas said in note.
The brokerage said any market correction could attract cash-rich insurance companies to Indian stocks.
Export-driven software services companies shrugged off tougher US rules against outsourcing and rose. Tata Consultancy Services and Infosys Technologies firmed 0.9% and 0.6% respectively, while Wipro rallied 3%.
Late on Monday, the finance minister said that recent comments by US President Barack Obama could lead to increased protectionism and he would raise the issue when G-20 leaders meet in South Korea.
Financials were mixed. HDFC Bank was trading up 1.1% at Rs2,473 after hitting a record 2,493.20. Mortgage lender Housing Development Finance Corp climbed 2%.
But State Bank of India and ICICI Bank, the country’s top two lenders, shed 0.3% and 1.8% respectively after a sharp run up.
Elsewhere, the MSCI’s measure of Asian markets other than Japan was down 0.1%, while Japan’s Nikkei erased early gains and slipped 0.3%.
STOCKS
Bharat Heavy Electricals Ltd rose 1.2% to Rs2,470. The power equipment maker said it got a contract worth $583 million to set up a 1,200 megawatts coal-fired power plant at Chhattisgarh in central India.
Hospitality chain EIH Ltd was up 2.2% at Rs139.70 after it said late on Monday it plans to consider a rights share issue on Thursday.
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First Published: Tue, Sep 21 2010. 12 53 PM IST