Mumbai: Indian shares were choppy with a negative bias on Tuesday as euro zone debt woes continued to hobble investors in the region, but traders said they expected the market to perk up on strong domestic growth.
Export-focused outsourcers climbed on hopes their limited exposure to the debt-ridden countries in Europe would not seriously dent their outlook, traders said.
However, financials eased on the shaky sentiment in the region.
By 10:59am, the 30-share BSE index was trading down 0.39% at 16,769.22, with two-third of its components declining.
“I think the Asian markets will rise above the European crisis,” said Gajendra Nagpal, CEO of Unicon Financial. “The euro zone woes are already factored in the price of Asian stocks and investors know the Asia story is on.”
Foreign funds have pulled out $665 million from Indian equities so far this month, sending the benchmark nearly 4% down.
Infosys Technologies and Wipro were up 0.3% and 1.7% respectively after BNP Paribas Securities said on Monday only a fraction of 13-57% revenue that large Indian IT companies get from Europe came from the debt-affected countries there.
“We are therefore leaving our forecasts and our positive sector view unchanged, but will closely watch the developments in Europe,” BNP Paribas said in a note.
ICICI Bank and HDFC Bank shed 1.8% and 1.5% respectively, while mortgage lender Housing Development Finance Corp was down 1.1%. But top lender State Bank of India edged 0.4% higher.
Energy giant Reliance Industries, which has the highest weight on the Sensex, was down 0.3% at Rs1,013.60.
Leading mobile operators Bharti Airtel and Reliance Communications, which have been battered by a call tariff war, climbed 0.7% and 0.8% respectively.
The stocks, the only two in the benchmark index that declined in 2009, are down 18.3% and 17.5% so far this year.
The telecom sector has been hammered by a tariff war, rising competition, high bids for third-generation licences and recent recommendation from the regulator over one-time spectrum fee.
In the broader market, gainers led losers in a ratio of 1.7:1 on volume of 115 million shares.
The 50-share NSE index was down 0.4% at 5,038.60.