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Markets drop 0.9%; Biocon hits record high

Markets drop 0.9%; Biocon hits record high
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First Published: Tue, Oct 19 2010. 05 26 PM IST
Updated: Tue, Oct 19 2010. 05 26 PM IST
Mumbai: Indian shares fell 0.9% on Tuesday in choppy trade as a $3.5 billion IPO by Coal India soaked up investor funds, but the undertone remained upbeat on robust quarterly earnings and strong foreign interest.
Biotechnology firm Biocon soared as much as 15.4% to a record high of Rs464.60, following a deal with Pfizer (PFE.N) to market insulin made by the Indian company.
Around 4.3 million shares were traded on the BSE, nearly 23 times its average 30-day volume. Coal India’s IPO, the country’s largest ever, drew strong investor interest, and was fully covered on the second day.
“It was a known fact that the IPO would absorb some liquidity for now. But that is going to be a temporary phase. There is enough liquidity otherwise,” Prakash Diwan, head of institutional business at Networth Stock Broking, said.
The 30-share BSE index .BSESN closed down 0.92%, or 185.76 points, at 19,983.13, with 24 of its components declining. It seesawed through the day, rising as much as 0.8% and then falling 1.2%. The 50-share NSE index shed 0.8% to 6,027.30 points.
Software companies led the losses as investors locked in gains after a recent run up. The sector index eased 2.2% but is up 16% year-to-date. Leading outsourcers Consultancy Services and Infosys Technologies dropped 1.2% and 3.1% respectively while Wipro (WIPR.BO) shed 0.8%.
Traders said the market, which has climbed 14.4% so far this year, looked good to rise further as foreign fundscontinue to pour money into Indian shares on hopes for better returns than developed economies fighting a slowdown.
“I would not read too much into today’s fall. India will continue to be a preferred investment destination,” said Gajendra Nagpal, CEO of Unicon Financial.
Foreign funds have pumped a record $23.3 billion into Indian stocks this year. “The macroeconomic scenario is favourable with robust economic growth outlook and that will continue to drive investors,” Nagpal said.
Private-sector lender HDFC Bank, which has rallied 39% since the start of January, eased 1.4% ahead of its July-September earnings. Analysts expect the net profit to rise by a third.
Advancing shares and declining ones were almost equal in number on relatively better volume of 485 million shares.
Elsewhere, the FTSEurofirst 300 rose 0.1% by 3:52pm, while the MSCI’s measure of Asian markets other than Japan dropped 0.2%.
STOCKS
ING Vysya Bank rose 9.4% to Rs418.35 after the lender reported a 41% growth in quarter earnings, beating estimates.
Drugmaker Alembic firmed 2.9% to Rs68.50 after quarterly consolidated net profit rose 63.8%, primarily on robust sales growth in branded formulations and active pharmaceutical ingredients.
Greaves Cotton rose 1.5% to Rs465.15, after the diesel engines and construction equipment maker said its July-September net jumped 52%.
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First Published: Tue, Oct 19 2010. 05 26 PM IST
More Topics: India | Stocks | Markets | BSE | NSE |