Mumbai: Indian shares stretched a rally into a fourth successive session on Wednesday, but there was resistance after the benchmark index hit a 22-month-high in early trade.
Investors took profits in export-focused outsourcers such as Infosys Technologies and Wipro that had more than doubled over the past year.
“The market is fairly priced at current levels. All eyes are now on earnings. Results are expected to be good, but that seems to be already there in the prices,” said Gajendra Nagpal, CEO of Unicon Financial.
The 30-share BSE index closed up 0.08%, or 14.89 points, at 17,701.13 after racing to 17,790.33 early, its highest level since 28 February, 2008. The 50-share NSE index closed 0.1% higher at 5,281.80.
Volume was relatively high for the third consecutive day, indicating longer trading hours kicked off on Monday were boosting business.
In the broader market, gainers led losers in the ratio of 1.1:1 on volume of 602 million shares.
Energy giant Reliance Industries, which has the highest weight on the Sensex, recovered 1.8% to Rs1,088.80 after dropping as much over the two previous sessions.
Financial stocks gained as investors were optimistic about their long-term prospects in a growing economy. Top lender State Bank of India climbed 0.6% while rival ICICI Bank gained 0.9%.
Infosys shed 1.4% and Wipro lost 1.7%, after rallying 131% and nearly 200% respectively since the start of 2009. Infosys, the No. 2 Indian outsourcer, is set to announce quarterly results on 12 January.
“The guidance is important now. If managements are gung ho about their future prospects, then there could be some room for those stocks to move up further,” Nagpal said.
Maruti Suzuki fell 3.5% to Rs1,462.60 after the central bank said foreign institutional holdings had reached a trigger limit and fresh purchases would need its prior approval.
Metal stocks edged lower as investors booked profits after the previous day’s sharp gains. Tata Steel shed 1.1%, Hindalco dropped 2.5% and Sterlite Industries eased 0.1%.
Tata Power Company rose 4.6% to Rs1,474.10, taking gains over five sessions to 9.1%, as investors bet firm thermal coal prices would boost the company’s earnings from its 30% holding in two Indonesian mines.