Bangalore: Shares seesawed on Friday as investors took profits after a four-day rise, but the market was on track to post its first weekly gain in four and the outlook was upbeat.
Outsourcers rose as economic data from the United States, their biggest market, pointed to an improving economy with better labour market data, a sharp jump in pending home sales and a stronger-than-expected November same-store sales.
A survey also showed business activity in India’s services sector surged to a four-month high in November, driven by robust growth in new orders.
Top ranked Tata Consultancy Services rose 0.7%, while rivals Infosys Technologies added 1.2% and Wipro climbed 1.1%.
Religare Enterprises rose as much as 4.3% early after it struck a deal to buy a majority stake in U.S.-based Landmark Partners for up to $171.5 million.
By 11:29am, the 30-share BSE index was up 0.2%, or 32 points, at 20,025.28, but 16 of its components lost ground. The index was down as much as 0.2% in early trade.
“The market is looking at a sideways movement. Some profit taking is also coming in,” said K.K. Mital, chief executive for portfolio management services at Globe Capital Markets.
“However, with expectations of more than 9% economic growth and food inflation coming down, the fundamental picture is improving.”
After being battered by a series of scandals, the benchmark index had risen 4.5% in the previous four sessions thanks to an improving outlook for the domestic economy.
The BSE index is up 14.7% so far this year, bolstered by overseas portfolio investments worth $29.1 billion.
India’s manufacturing sector expanded at its fastest pace in six months in November on a surge in new business and a sharp rise in export orders, a survey released this week showed.
Official data earlier showed India’s $1.3-trillion economy expanded at a faster-than-expected 8.9% annual pace in the September quarter. The services sector, which accounts for more than 50% of GDP, grew 9.8%.
Banking stocks that had rallied on expectations for higher loan demand in the fast expanding economy came off on profit-taking.
State Bank of India and ICICI Bank were down 0.1% and 0.8% respectively, while the banking index dropped 0.8%.
In the broader market, losers were almost double the number of gainers on volume of about 161 million shares.
The broader 50-share NSE index was down 0.01% at 6,011.
The MSCI’s measure of Asian markets other than Japan gained 0.6% by 11:33am, while Japan’s Nikkei was up 0.1%.
Murli Industries, Ackruti City Ltd and Welspun Corp slumped 14-19% after the market regulator barred founders and related entities of the firms from trading on the stock exchanges.
Mahanagar Telephone Nigam Ltd rose as much as 4.7% after the state-owned telecom company said it had received tax refund worth Rs 300 crore, including Rs 922.2 million as interest on refund, for FY02 and FY03.