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Markets trim fall; Kotak Mahindra rallies

Markets trim fall; Kotak Mahindra rallies
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First Published: Wed, Jun 30 2010. 11 30 AM IST
Updated: Wed, Jun 30 2010. 11 30 AM IST
Mumbai: Indian shares pulled back from early lows on Wednesday and were on track to post their best monthly performance since March, but traders said the market would be choppy in the near term due to shaky world markets.
A strong economic rebound and rising corporate earnings have boosted foreign fund investments in Indian shares, but lingering worries about the euro zone debt problems continue to keep investors wary.
Kotak Mahindra Bank rallied as much as 3.1% after Japan’s Sumitomo Mitsui Financial Group <said it had agreed to buy a 4.5% stake in the Indian lender for $296 million.
By 11:28am, the 30-share BSE index was trading down 0.07% at 17,521.26, with 19 of its components declining. It fell as much as 0.9% at one stage and had briefly moved into positive territory. The 50-share NSE index was down 0.03% at 5,254.70.
The benchmark is up 3.4% so far this month and is on track to post its best monthly show since March when it had risen 6.7%.
“In the near term, the market will continue to be choppy. Things will stay uncertain until there is stability overseas,” said Vaibhav Sanghavi, director of Ambit Capital.
Asian stocks were trading weak as investors unwound risky positions before the quarter-end on concerns over banks’ funding conditions in Europe.
Export-focused software companies dropped as traders booked profits. Bellwether Infosys Technologies shed 1.1%, but is up 5.5% so far this month. Leading outsourcer Tata Consultancy Services was down 0.4% while smaller rival Wipro dropped 1.1%.
Foreign funds have bought shares worth $2.1 billion in June, after dumping $2 billion in May when the euro zone worries had dented risk appetite and sent the BSE index sliding 3.5% in the month.
The Sensex is barely changed this quarter, and up 0.3% in the year to date. In comparison, the MSCI’s measure of Asian shares other than Japan has dropped 7.5% this year.
The Indian benchmark may rise to 19,000 points by end-2010, the median estimate in a Reuters poll of 20 market participants showed last week, while 17 forecast it rising to 21,000 by end-June 2011.
In the broader market, losers led gainers in the ratio of 1.1:1 on volume of 167 million shares.
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Metal producers declined as base metal prices dropped in Shanghai. Tata Steel Sterlite Industries and Hindalco were down between 0.8% and 1.7%.
Alstom Projects was up 2.6% at 668.15 rupees after the company, which provides power generation services and equipment, said it won a 4.58-billion-rupee order from Bharat Heavy Electricals Ltd.
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First Published: Wed, Jun 30 2010. 11 30 AM IST
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