Mumbai: Markets seesawed on Thursday as resistance emerged after a two-day rise, with financials coming under pressure on expectations the central bank may again raise rates this month.
By 11:30 am, the 30-share BSE index was flat at 17,063.61, with 17 of its components declining, after initially rising 0.4% and then retreating 0.3%.
The Reserve Bank of India remains bent on fighting domestic inflation despite weakening global conditions, officials with direct knowledge of policymaking said on Wednesday, a week before it is widely expected to raise interest rates once again.
HDFC Bank fell 1.35%, while top lender State Bank of India was down 0.12%.
Ranbaxy Laboratories rallied more than 5% on reports the company would release a generic version of the blockbuster cholesterol-lowering drug Lipitor in the United States at the end of November as planned.
Energy major Reliance fell 1.5% after rallying 5.6% over the previous two days, while leading engineering and construction conglomerate Larsen & Toubro dropped 0.2%.
Export-driven software services Infosys rose 2.4%, Tata Consultancy Services gained 1.9% and Wipro rallied 4% on hopes US President Barack Obama will unveil a more than $300 billion package on Thursday to boost jobs.
The United States is the biggest market for India’s $76 billion information technology companies.
“For one-and-a-half months, IT has lost ground but the fundamentals have not changed. Hence some recovery was expected,” Sanjiv Hoota, sector analyst at brokerage Sharekhan, said.
Indian shares have been one of the world’s worst performers this year, with the BSE index down more than 17%, as rising interest rates dented growth.
“The market will remain in a narrow range as Europe and US crisis continue to worry. Even if a relief package is announced by Obama, there are fears that the commodity prices will go up and the end-user will get hurt,” R.K. Gupta, managing director, Taurus Mutual Fund, said.
The 50-share NSE index was little changed at 5,134.4. In the broader market, advancing stocks led losers 903 to 439 on volume of 260.7 million shares.
“We have seen almost 400 points rally in the Nifty (over the last 10 days) and some profit-taking was expected,” Neeraj Dewan, director, Quantum Securities said, adding investors will take direction from Europe’s open later.
The MSCI’s measure of Asian markets other than Japan was up 0.04%, while Japan’s Nikkei gained 0.34%.
Wall Street bounced more than 2% on Wednesday, reversing three days of losses after Germany’s top court smoothed the way for Berlin’s participation in bailouts that could ease Europe’s debt crisis.
Managalore Refinery and Petrochemicals rose more than 2% after its managing director told Reuters the company may boost middle distillate exports by about 80% and halt fuel oil exports from 2013/14 once it completes expanding capacity.
Jaiprakash Associates fell more than 3% after the company said it had not submitted a proposal to dilute up to 26% of its cement business to its restructuring committee.