Noon: Markets turn negative, had been up 1.1%

Noon: Markets turn negative, had been up 1.1%

Mumbai: Indian shares erased gains of as much as 1.1% and turned negative on Tuesday afternoon, led by declines in No. 2 IT-services firm Infosys Technologies and leading telecom Bharti Airtel.

At 1:00pm, the 30-share BSE index was down 0.4% at 16,430.48 points, with 20 stocks declining, after rising as high as 16,677.53 earlier.

The 50-share NSE index was down 0.4% at 4,876.65.

Indian shares were up 0.2% after an early rally triggered resistance, but Reliance Industries firmed after the energy giant said it found oil in a block off the western coast.

Gajendra Nagpal, CEO of Unicon Financial, said investors were upbeat after G-20 finance ministers’ pledge to keep emergency measures in place until a recovery was assured, but there was concern about valuations.

Reliance, which has the heaviest weight in the main index, rose as much as 3.7% after the oil discovery announcement in the Cambay basin off Gujarat state.

By 11:24am, the 30-share BSE index was trading up 0.16% at 16,525.70, with 19 of its components gaining. The 50-share NSE index was up 0.2 % at 4,909.20.

The index rose as much as 1.1% in early deals, but faced resistance after rising for the past four previous.

“We are cautious on our market as valuations do not support a runaway rally," Nagpal said, although the sentiment was turning better globally with the feeling that the stimulus measures will be kept in place for some time.

The benchmark index is up more than 71 % so far this year, helped by foreign funds inflow of almost $14.4 billion.

Reliance was up nearly 2 % at Rs2,064 after rising as high as Rs2,100.

Leading banks such as State Bank of India and ICICI Bank firmed as the long-term outlook for them was positive, analysts said.

“I would still recommend a buy on banks. If the economy has to grow, banking is going to play a very vital role there," said Nagpal.

State Bank rose 1.5 % to Rs2,353 and ICICI climbed 1.3 % to Rs900.75.

Wipro, the country’s No. 3 software services exporter, was up 0.8 % at Rs607.55, as it saw robust deal pipeline on the back of improving IT demand worldwide.

In the broader market, gainers led losers in the ratio of 1.3:1 on volume of 151 million shares.