BackShares down 0.2%; techs fall
Shares down 0.2%; techs fall
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Mumbai: Shares eased 0.2% on Wednesday, with export-driven software services companies leading the decline on worries about the global economic outlook.
Investors were reluctant to build positions ahead of an expected interest rate increase on Thursday when the Reserve Bank of India (RBI) reviews policy, after inflation came in higher than expected.
The market was also watching advance quarterly tax paid by companies, which provide clues on the outlook for earnings, traders said.
Dr Reddy’s Laboratories shed as much as 2% after the US Food and Drug Administration (USFDA) said it had issued a warning letter to the Mexican facility of the Indian drugmaker for violating manufacturing standards.
The stock later pared losses and was trading down 0.3%.
Software services exporters Infosys Technologies and Wipro were down 1.5% and 0.2% respectively.
Their bigger rival Tata Consultancy Services (TCS) bucked the trend and rose 0.7% after a source in the tax department said the company paid 2.4 billion rupees as quarterly advance tax, compared with 1.3 billion a year before.
Mortgage lender Housing Development Finance Corp was up 1.4% after the tax source said it paid Rs350 crore advance tax, up from Rs320 crore a year ago.
At 11:36 am, the 30-share BSE index was down 0.22% at 18,268.35 points, with 21 components declining.
“There is nothing to push the market higher at this point in time," said K. K. Mital, head of portfolio management services at Globe Capital.
“After the inflation figures we saw yesterday, there is nervousness before the central bank policy tomorrow."
The RBI is expected to raise its policy interest rate by a total of 75 basis points for the rest of 2011, including a 25 basis point increase on Thursday, unchanged from forecasts on 3 May, a Reuters poll found on Tuesday.
Leading lenders State Bank of India and ICICI Bank shed 0.5% each, while HDFC Bank was barely changed.
India’s economy is beginning to show signs of slowing despite inflation that is racing well above the central bank’s comfort zone, putting policymakers in a tight spot over the extent of further interest rate increases.
Around 205 million shares were dealt on the NSE, with gainers outnumbering losers in the ratio of 1.2 to 1.
The 50-share NSE index was down 0.2% at 5,487.80.
Metal producers traded in the red as base metal prices declined in world markets. London copper fell, hit by a stronger dollar and arbitrage trade.
Sterlite Industries and Hindalco were down 1.2% and 0.6% respectively.
The MSCI’s measure of Asian markets other than Japan was down 0.1%, while Japan’s Nikkei rose 0.3%.
Stocks on the move
• Biocon was down 1% at Rs371.30 after Bank of America-Merrill Lynch downgraded the top-listed biotechnology firm to ‘neutral’ from ‘buy’ and cut its target price to Rs395 from 435, saying it expects limited upside due to lack of near-term catalysts.
• Maruti Suzuki eased 0.5% to Rs1,215.90 after the company refused to cave in to demands for the recognition of a new union and the reinstatement of 11 fired employees, prolonging a strike that has cost the top carmaker millions of dollars.
• Mastek jumped 13.4% to Rs120.75 after the software services firm said late on Tuesday its UK unit had signed a multi-year framework agreement for IT services with an initial minimum commitment of 8 million pounds.
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