Markets post biggest monthly gain in 7 months despite fall

Markets post biggest monthly gain in 7 months despite fall

Mumbai: Shares posted their biggest monthly gain in seven months, even as the main stock index snapped a four-day winning streak on Monday, edging down 0.6% by close as risk-wary investors locked in profits and stayed away from fresh buying.

Software and financial stocks ended higher, buoyed by strong results in key sector companies, but index heavyweight Reliance Industries Ltd and automobile stocks counted among the main losses.

Sentiment was dampened as world equities fell after commodities retreated, prompted by the dollar rising to a three-month high against the yen after Japan intervened to weaken its currency, spurring some profit-taking after last week’s rally.

The 30-share BSE index ended down 99.79 points, or 0.56% at 17,705.01, after briefly turning positive at one stage. Twenty-three of its components ended lower.

The index, however, posted gains of 7.6% for October, its best monthly performance since March.

The index had logged its biggest weekly gain in nearly two months last week, after it ended up 6.1%, bolstered by hopes of an end to the long monetary policy tightening cycle in Asia’s third-largest economy.

“People have been holding stocks waiting for the right price, so there has been profit booking, especially from local investors," said Hitesh Dang, vice president for institutional sales at Jaypee Capital.

Energy major Reliance Industries, which has the highest weightage on the index, fell 2.5% to 877.55 rupees. The stock, which has risen nearly 10% in October, saw profit booking at higher levels. It is still down 17.1% so far in 2011, underperforming the main index.

Shares in automakers also suffered on increasing concerns about growth outlook after the country’s top car maker Maruti Suzuki India Ltd posted a sharp fall in quarterly profit, hit by labour unrest at its key plants and rising interest rates.

Maruti ended down 0.1%, after falling as much as 5.9%. Tata Motors Ltd , Mahindra and Mahindra Ltd and Bajaj Auto Ltd declined between 1 and 4%.

Non-ferrous metals producers Sterlite Industries (India) Ltd and Hindalco Industries Ltd ended down 4.1% each, hurt by the fall in copper and aluminium futures in the London and Shanghai markets.

Gains for the session were led by consumer goods maker Hindustan Unilever Ltd , which rose to an all-time high of 378.15 after it beat forecasts with a 21% jump in quarterly net profit. Its shares ended up 7.1% at 375.80.

Software stocks ended lower on profit booking, but had traded higher through most of the session after No. 3 software services exporter Wipro Ltd beat brokerage estimates with its quarterly profit and forecast better-than-expected IT services revenue growth despite global uncertainty.

Wipro shares ended 2% lower, after having risen as much as 3% in trading. Larger rivals Infosys Ltd ended up 0.7%, while sector leader Tata Consultancy Services Ltd slipped 0.5%.

Shares in India’s No 2 lender lender ICICI Bank Ltd closed lower after rising as much as 2.2% as it beat street estimates with a 21.6% rise in second-quarter profit, led by higher income from interest and investments, and lower provisions for bad loans.

Shares in rival HDFC Bank Ltd , however, ended 1.5% higher.

The 50-share NSE index closed down 0.64% at 5,326.60 points.

In the broader market, gainers narrowly outpaced declines in the ratio of 1.1:1 on strong volume of about 609 million shares.