Mumbai: Indian shares reversed early losses and eked out a 0.2% gain on Monday, as robust foreign fund interest and strong September quarter earnings overshadowed the pressure from the launch of country’s biggest-ever initial share offer. Outsourcers led the gains.
Coal India launched its $3.5 billion initial public offering, with its lower-than-expected pricing and exposure to India’s booming electricity demand expected to draw solid investor interest.
Net foreign fund inflows into Indian equities, including primary market offers, have totalled to $23.2 billion year to date, which has helped the benchmark index gain 15.5%.
The 30-share BSE index closed 0.22% or 43.84 points higher at 20,168.89, with 13 of its components closing in the green.
It fell as much as 1.3% earlier to 19,870.51 points, its lowest level this month.
“I think it is just going to be a bit choppy. With a big IPO like Coal India around, some liquidity is definitely going to be absorbed by the issue. But, it is not a big concern,” said Sandip Raichura, business head at PINC Money Wealth Management.
“We strongly recommend the (Coal India) issue. It is a sector which people otherwise didn’t have access to. Its a different asset class by itself.”
Raichura also said domestic stocks are not insulated from world market jitters.
India does not need to limit capital inflows for now but is watching the situation closely in order to avoid volatility, the country’s finance minister said in an interview to Reuters late on Friday.
Top engineering and construction firm Larsen & Toubro erased early losses to close 1.2% higher after beating market estimates with a 32% rise in quarterly profit, on a pickup in order execution.
Software companies gained, rebounding from sharp losses on Friday, with the sector index rising 1.3% after a 3.3% fall in the previous session.
Leading outsourcers Infosys Technologies and Tata Consultancy Services climbed nearly 3% and 1% respectively.
Financials closed mixed on concerns the central bank may tighten its monetary stance, as it braces to tame rising inflation in Asia’s third-largest economy.
Top private lender ICICI Bank shed 0.9% while leading lender State Bank of India inched 0.1% up.
Mortgage lender Housing Development Finance Corp closed 0.3% lower despite posting a 21.5% rise in its September quarter net profit.
The Bombay Stock Exchange and National Stock Exchange on Monday began their 15-minute pre-opening session, in the cash and derivatives markets, which starts at 9 am only for the 50 stocks in the NSE’s Nifty index.
The market for other securities resumes trade at 9:15 am and closed at 3:30 pm.
In the broader market, declining shares led advancing ones in the ratio of 1.4:1 on a relatively lower volume of 417 million shares.
The 50-share NSE index closed 0.2% higher at 6,075.95 points.
Elsewhere, MSCI’s emerging market stock benchmark was down 1% at 1032 GMT, while MSCI all-country world index dropped 0.3%.