Mumbai: Shares on Monday fell to their lowest level in October on weak Asian peers and as Coal India’s initial public offering, the country’s largest ever, hit the market, diverting some attention away from secondaries.
India aims to raise up to $3.5 billion by selling shares in Coal India, the world’s largest miner, having set a price band of Rs225 to 245 a share, which brokers and fund managers said looked attractive.
Software majors were subdued, as most positives were already factored in the price after their recent rally, dealers said. The sector index was down 1%, but is up 16% year to date.
At 11:11am, the 30-share BSE index was down 1.06% at 19,912.62 points, with 26 of its components declining. The 50-share NSE index was down 1.1% at 5,993.30 points.
It fell as much as 1.3% to 19,870.51 points, its lowest level this month.
“After the rally that we saw, market needs a reason to consolidate. Weak world markets and Coal India IPO are the excuses for now,” said R.K. Gupta, managing director of Taurus Mutual Fund.
“Also, it is generally the case that stocks run up ahead of results on expectations, and investors tend to book profits when the numbers are unveiled.”
Foreign funds have invested $23.2 billion in Indian equities so far in 2010, helping the Sensex gain nearly 14%.
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 9:00am only for the 50 stocks in the NSE’s Nifty index.
The market for other securities will resume at 9:15am and will close at 3:30pm.
Infosys Technologies, the country’s second-largest software services firms was trading barely changed while rival Wipro shed 1.8%.
“The recent run up in the stock (Infosys) was based on expected high revenue growth, which was delivered, but with marginally lower-than-expected volume growth,” Edelweiss said in a note.
The brokerage said in a note on Friday it believed Infosys was fairly valued and maintained a “hold” rating on the stock.
Sector leader Tata Consultancy Services bucked the trend and rose 0.8%.
Mortgage lender Housing Development Finance Corp and top engineering firm Larsen & Toubro shed 2.6% and 2.1% respectively, ahead of their September quarter earnings.
Financials declined on expectations that surging inflation could lead the central bank to tighten its monetary policy. Leading private lenders ICICI Bank and HDFC Bank dropped 0.3% and 1.9% respectively. Top lender State Bank of India shed 0.6%.
Nomura downgraded India’s HDFC Bank to neutral from buy after the stock’s recent sharp rally.
In the broader market, gainers were twice the number of losers on a volume of 150 million shares.
Elsewhere, the MSCI’s measure of Asian markets other than Japan was down 1.3%, while Japan’s Nikkei declined 0.3%.
India’s Commercial Engineers & Body Builders Co Ltd listed at 119 rupees on the NSE, a discount of 6.3% to the issue price of 127 rupees a share.
The stock erased some of the early losses and was trading at Rs123.80.
Sasken Communication Technologies firmed 3.4% to 208 rupees after the telecom software firm said late Friday its board would meet on 21 October to consider share buyback.