Mumbai: Indian shares fell for the third time in four sessions, closing 1.4% lower on Thursday, as traders opted to cash in gains as the market traded near a record high, with subdued world stocks providing no support.
DLF plunged 4.4%, after the top real estate firm said late on Wednesday its quarterly net profit declined 5% versus a year ago amid rising interest rates and higher land and construction costs.
The 30-share BSE index .BSESN closed 1.37% or 286.62 points lower at 20,589.09 points, with 25 of its components losing ground. It rose as much as 0.3% early, to 20,937.38, and was only around 270 points away from a record high. The 50-share NSE index .NSEI dropped 1.3% to 6,194.25 points.
“It is just the usual profit booking when we trade close to record levels,” said Deven Choksey, managing director and CEO of KR Choksey Shares. ”I would say such a decline helps to create headroom for the market to go up.
India’s benchmark index has outperformed broader indices so far in 2010, with a nearly 18% gain year-to-date, triggered by $28.5 billion of foreign fund investments.
MSCI’s measure of Asian markets other than Japan has gained 14.8% in 2010, while its emerging markets index .MSCIEF has registered a 15.7% rise.
Around 640 million shares were traded on the BSE on Thursday, more than one-and-a-half times the 30-day average volume, data from Thomson Reuters showed.
In the broader market, declining shares outnumbered advancing ones by a ratio of 1.3:1 with 262 stocks touching new highs.
Hindalco was one of the few gainers among Sensex stocks and closed 2.7% higher at Rs234.05 after RBS raised its target price on the aluminium maker to 287 rupees from Rs229 earlier, while maintaining a buy rating.
Energy major Reliance Industries extended losses and dropped 1.9%, due to lack of any near-term triggers, dealers said. The stock, which has the highest weighting on the Sensex, has been a laggard and is down 0.7% in 2010.
Top engineering and construction firm Larsen & Toubro declined 1.3%, as investors booked profits. The stock is still up 26.9% since the start of January. Bharti Airtel extended losses and dropped 3.3% as the top mobile operator on Wednesday reported a bigger-than-expected 27% drop in quarterly profit after being squeezed by a price war, but said it continued to generate healthy free cashflow.
“We believe the lacklustre revenue trend in India underscores the negative effects of fierce competition, and that the turnaround in the Africa operation is still some time off,” Daiwa said in a Bharti Airtel note on Wednesday.
Elsewhere, world equities as measured by MSCI’s all-country index was up 0.2% at 3:48pm, while the more volatile emerging markets index shed 0.3%.
Apollo Tyres (APLO.BO) slid 6.5% to Rs70.35 as the tyremaker’s September quarter consolidated net profit declined by 59%.
Britannia Industries closed 2.2% lower at Rs431.25 as the biscuits and dairy business company said late on Wednesday its July-September net profit dropped 46%.
World’s largest coal miner Coal India recovered 1.8% to Rs328.45, after declining nearly 8% in the first three sessions this week.