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Shares lose steam after 3-day rally; Cairn drops

Shares lose steam after 3-day rally; Cairn drops
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First Published: Tue, Jun 28 2011. 11 36 AM IST
Updated: Tue, Jun 28 2011. 11 36 AM IST
Mumbai: Shares eased in choppy trade on Tuesday as investor concern shifted to local issues such as high inflation and rising interest rates, after the market had rallied nearly 5% over three days.
“The rise was overdone. The bounce was more due to short-covering,” said Ambareesh Baliga, chief operating officer of Way2Wealth Securities.
“Fundamentally, except for crude prices coming off, nothing else had changed overnight. People are now using the spike in stock prices to book profits.”
Cairn India was down 0.8% after Vedanta Resources Plc rejigged a long delayed acquisition plan that will cut the price tag by more than $600 million. The stock had fallen 2.4% in preopen trade.
At 10:44 am, the 30-share BSE index was down 0.37% at 18,343.37 points, with 19 components declining, after initially rising 0.6%.
Energy giant Reliance Industries, led the losses falling 0.7%, after rising 3% over three sessions.
Metal producers Sterlite Industries and Hindalco Industries rose 1.6% and 0.4% respectively on firm international base metal prices.
Copper edged up in Shanghai on increasing confidence that the Greek parliament will pass an unpopular austerity plan.
The 50-share NSE index was down 0.4% at 5,505.90.
Around 176 million shares were dealt on the NSE, with losers exceeding gainers in the ratio of 1.1 to 1.
Foreign funds were net buyers of $335 million over two days to Friday, after pulling out $688 million over nine sessions.
The BSE index is down more than 10% year-to-date on slowing earnings outlook after the Reserve Bank of India (RBI) raised key rates by 275 basis points in 10 moves over 15 months.
Asia traded firm with The MSCI’s measure of Asian markets other than Japan gaining 0.2%, while Japan’s Nikkei rose 0.6%.
Stocks on the move
• Union Bank fell 2.2% to Rs307.15, after Bank of America Merrill Lynch downgraded the state-run lender to “underperform” from “neutral” and cut its price target to Rs295 from 350, citing near-term asset quality headwinds.
• Shipbuilder ABG Shipyard dropped 2.6% to Rs360.05 after 2.6 million shares, or 5.2% equity, changed hands in a block deal on the BSE at Rs355.25 each.
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First Published: Tue, Jun 28 2011. 11 36 AM IST
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