Mumbai: Indian shares extended their fall to 1% on Friday afternoon, as investors took profits ahead of the weekend on a more than 90% rally since early March.
At 1:56pm, the 30-share BSE index was down 0.9% at 15,276.81 points, with 20 stocks declining, after falling to as much as 15,255.56 earlier.
The 50-share NSE index was down 0.8% at 4,598.90.
Industrial output unexpectedly rose by 1.4% in April from a year earlier, after declining three times in four months, but analysts said this could halt a rate cutting cycle.
At 12:26pm, the 30-share BSE index was down 0.1% at 15,431.65 points, with 17 stocks declining. The 50-share NSE index was flat at 4,639.60.
Markets rose 1%, riding a rally across Asia after upbeat US and Chinese economic data lifted investor confidence.
Energy giant Reliance Industries, private-sector lender ICICI Bank and diversified cigarette maker ITC led the gains.
Sesa Goa jumped to its highest in a year after the miner’s managing director said it aimed to raise iron ore output by more than half to 22.75 million tonnes in 2009/10, helped in part by the acquisition of assets from a small rival.
Oil and Natural Gas Corp bucked the trend and fell after its chairman said on Thursday the state-run explorer may have suffered a Rs3,000 crore ($632 million) loss of revenue for selling gas at government-fixed prices in 2008/09.
By 11:28am, the 30-share BSE index was up 0.85% at 15,542.99 points, with 18 stocks advancing. The 50-share NSE index was up 0.8% at 4,674.70.
More than $7 billion in foreign funds have poured into the market since mid-March, boosting the benchmark over 90% from a 2009 low on 6 March.
Rising optimism about the global economy, a rally across world equity markets, hopes for pro-market reforms from the re-elected ruling coalition and expected corporate earnings growth later in the year have all boosted sentiment.
“Investors seem to be finding a new set of stocks to keep the momentum going up almost everyday,” Arun Kejriwal, strategist at research firm KRIS, said.
The market is up more than 60% this year, after plunging by more than half in 2008 when foreign investors withdrew $13 billion.
“But I think the momentum may be waning. If foreign funds pull out for three days, then we are chewed,” Kejriwal said.
India’s industrial output is likely to have shrunk marginally in April from a year earlier, its fourth fall in five months, but analysts think the worst has passed and output will start picking up. The data is expected around noon (0630 GMT).
Sesa Goa rose as much as 11.3% to Rs213.75, its highest since 2 June last year, after acquired the mining assets of Dempo Group in the western state of Goa for Rs1,750 crore ($368 million).
“We are encouraged by Sesa’s proposed acquisition of Dempo’s mining assets and by management’s ability to deliver on its promise to utilize its strong balance sheet to enhance Sesa’s size and competitiveness,” Morgan Stanley analyst Vipul Prasad said.
The deal could add value to the firm, “especially due to opportunities to share infrastructure in Goa and possibility of further exploration by Dempo”, he wrote in a note.
Reliance, which has the most weight in the main index, rose 2% to Rs2,345.25 rupees, while ICICI Bank advanced 2.8% to Rs771.50.
ITC, which also has business interests in consumer goods, hotels and agri-commodities, gained 1.4% to Rs200.70. ONGC dropped 1.1% to Rs1,105.70.
In the broader section, gainers led losers 1,196 to 1,117 on relatively moderate volume of 191.4 million shares.
Asian shares were higher on Friday, with Japan’s Nikkei up 1.4%, while MSCI’s measure of other Asian markets rose 0.2%.