Mumbai: Indian shares closed 0.3% lower on Tuesday, erasing early gains, tracking weak European equities which remained fragile mainly ahead ofquarterly earnings from US investment bank Goldman Sachs.
Investors were also cautious with a drop in US housing data showing cracks in the recovery of the world’s largest economy.
“The market is just following global markets. It seems likeit has no mind of its own,” said Arun Kejriwal, director ofresearch firm KRIS. “Nothing materially has changed between morning andevening. We opened higher because Asia was firm and closedlower because Europe tumbled.”
At 3:39pm, the pan-European FTSEurofirst 300 was down 0.6% while MSCI’s broader measure of Asian markets other than Japan .MIAPJ0000PUS rose 1.1%.
Financials led the losers, with the banking sector index declining 0.4% after rising 1.1% overthe two previous sessions. Top lender State Bank of India dropped 0.3%while leading private sector lenders ICICI Bank and HDFC Bank declined 1.2% and 0.3% respectively.
Mortgage lender Housing Development Finance Corp declined 1.2%. The 30-share BSE index fell 0.28%, or 50.28 points to 17,878.14, with 20 of its components closing in the red.
Foreign funds, the major investors in Indian market, have pumped in $8.6 billion in Indian stocks so far in 2010, driving the benchmark 2.4% higher.
India’s BSE Sensex has outperformed broader indices so far this year. The MSCI’s broader measure of Asian markets other than Japan is down 6.2% so far in 2010.
World stocks as measured by MSCI have dropped 6.5% this year and the emerging market benchmark .MSCIEF has declined 4.5%.
According to fund tracker EPFR Global, emerging market equity funds absorbed the highest inflows since the third week of October in the week to 14 July. India equity funds alone took in $114 million, a 13-week high, EPFR Global said.
Metals makers rallied in line with regional peers, while hopes of robust domestic corporate earnings also helped sentiment. The sector index rose 0.2% as the resources index for Asian shares other than Japan firmed 1.9%.
Non-ferrous metals producer Sterlite Industries and aluminium maker Hindalco (HALC.BO) rose 1.5% and 0.2% respectively.
Energy giant Reliance Industries, which has the highest weight on the Sensex, dropped 0.3% dragged down by weak global equities.
Iron ore exporter Sesa Goa firmed 1.1% after its consolidated net profit for the June quarter trebled. The share was also helped after a senior government official told Reuters on Monday India had no plans to curb iron ore exports.
On Tuesday, cabinet secretary K.M. Chandrasekhar, the country’s top bureaucrat, said he was not aware of any plan to hike export duty on iron ore.
In the broader market, declining shares outpaced advancing ones in the ratio of 1.3:1 in a relatively moderate volume of 386 million shares.
The 50-share NSE index , or Nifty, closed 0.3% lower at 5,368 points.
MindTree shed nearly 5% to Rs540.20 after its quarterly results disappointed investors, dealers said.
Power trader PTC India rose nearly 2% to Rs107.70 as a top official said it is talking to private equity firms to dilute stake in its unit PTC India Financial Services, before going in for an initial public offer some time this year.
Software services firm NIIT Technologies climbed 1.5% to Rs185.70 as its quarterly net profit more than doubled although currency risks remained a challenge in coming quarters.