Mumbai: Shares flip-flopped on Tuesday as investors continued with bargain hunting despite concerns about the health of the global economy, while weariness ahead of the monthly derivative contracts expiry weighed.
Coal India, the world’s largest coal miner led the losses, dropping 3%. The state-run firm, which last week overtook energy giant Reliance Industries as India’s most valuable company, had risen more than 2% in the previous seven sessions.
At 12:08 pm, the main 30-share BSE index was up 0.35% at 16,398.72 points, with 17 of its components in the green. The index had fallen as much as 0.8% earlier.
“Global cues are positive, but only just about,” said Arun Kejriwal, strategist at research firm KRIS.
European shares were set to follow Asian gains on Tuesday after a survey of Chinese factory output soothed fears of a hard landing for the world’s No.2 economy, but gold hit a record on persistent concerns about the health of the developed world.
“Yesterday’s gain was on thin volumes...the fact is that there has been little participation from the FIIs (foreign institutional investors),” he said.
FIIs have sold Indian stocks worth about $1.7 billion so far in August, after having purchased a similar amount in July.
Last week, the index logged its fourth straight weekly loss, its longest such streak since Lehman Brothers’ collapse in September 2008.
Analysts said volatile trade was typical ahead of the expiry of the August derivative contracts on the National Stock Exchange on Thursday.
“This is a rollover problem. So the volatility is likely to be there for another two days,” said Kishor Ostwal, chairman of CNI Research.
Tata Motors fell nearly 3% after Wall Street bank Morgan Stanley cut its price target to Rs974 from Rs1,324, as it sees its unit Jaguar Land Rover (JLR) underperforming in 2011-12 because of deteriorating global macro environment.
Software services firms recovered ground after having fallen on Monday. Top software exporter Tata Consultancy Services gained more than 4%, while rival Infosys rose 2%.
The 50-share NSE index was trading 0.42% higher at 4,919.45 points.
In the broader market, 924 advancers outnumbered 411 decliners on a volume of 243.08 million shares.
Japan’s Nikkei share average rose 1.22% on Tuesday, while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 2.2%.
Stocks on the move
• Shares of GVK Power and Industries rose 6% after it said late Monday that it had acquired 14% additional stake in Bangalore International Airport from Siemens Project Ventures.
• Shares of Mahindra Satyam fell nearly 6% after the company said late Monday that it had received an income tax notice worth a total of Rs2,114 crore for assessment years 2002-03 and 2007-08.