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Midsession: Sensex turns negative on profit-taking

Midsession: Sensex turns negative on profit-taking
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First Published: Wed, Jun 03 2009. 01 59 PM IST
Updated: Wed, Jun 03 2009. 01 59 PM IST
Mumbai: The BSE Sensex turned negative on Wednesday afternoon after it had risen more than 1% to a nine-month high in early deals.
Infosys Technologies and Reliance Industries led the index losers.
At 1.25 pm, the 30-share BSE Index was down 0.12% at 14,857.11 points, with 17 components advancing. The 50-share NSE Index was down 0.31% at 4,511.35 points.
Indian shares were trading up 0.5% in the morning after the main index climbed past 15,000 points to a nine-month high, as optimism the global economy was on the path to recovery boosted markets across Asia.
“I don’t see this run getting exhausted until new money from foreign funds stops flowing into the market. Even if there is a correction, it will be short-lived,” Deven Choksey, chief executive of K R Choksey Shares & Securities, said.
Top telcoms firm Bharti Airtel, which is in merger talks with South Africa’s MTN, Tata Motors and diversified cigarette maker ITC led the gains.
By 11:26am, the 30-share BSE index was up 0.5% at 14,952.19 points, with 23 stocks advancing, after rising more than 1% to 15,045.88 points. The 50-share NSE index was up 0.5% at 4,546.80.
The benchmark breached 15,000 points for the first time since last 8 September, and is up 86% from a 2009 low in early March, riding a wave of relief the world economic crisis was easing.
The index has soared 55% this year, fuelled by foreign fund investments of more than $6 billion since mid-March, after falling by more than half in 2008 when the funds pulled out about $13 billion from the market.
The renewed foreign interest is forecast to continue as expectations run high for pro-market reforms such as relaxation of foreign investment rules in the insurance and pension sectors, and increased infrastructure spending.
“Foreign funds are increasingly pouring money into emerging markets like India, as stimulus measures provided by various governments has given rise to a lot of new money,” Choksey said.
“India is more expensive compared with other emerging markets, but I think it offers better growth opportunities.”
Recent encouraging economic data from around the world also also helped, traders said.
Modest but surprising growth in Australia, a jump in US pending home sales and steadying confidence among global consumers added to evidence the world economy, while not rebounding, has come through the worst of the slump.
Choksey said the BSE index will face resistance at 15,100 and 15,700.
Bharti rose 0.7% to Rs805.75, a day after South African mobile group MTN’s biggest shareholder said he supports revived merger talks with the Indian firm in principle, but believes there is “room for improvement” on the price.
ITC climbed 3.2% to Rs198. Leading vehicle maker Tata Motors advanced 7.6% to Rs375.50, a day after rating agency Moody’s Investors Service changed its outlook on the company to “stable”.
In the broader section, gainers led losers by more than 4 to 1 on relatively heavy volume of 303.1 million shares.
Asian shares were higher after a rise on Wall Street overnight. Japan’s Nikkei was up 0.2%, while MSCI’s measure of other Asian markets rose 1.4%.
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First Published: Wed, Jun 03 2009. 01 59 PM IST
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