Profit-booking hits Sensex run
Profit sales took the fizz out of the equities rally on Wednesday, with the BSE Sensex edging 0.3 per cent lower, after hitting fresh 32-month highs in the day, with weak European shares and a likely lower opening in the U.S. markets also weighing on the sentiment.business Updated: Sep 22, 2010 23:48 IST
Profit sales took the fizz out of the equities rally on Wednesday, with the BSE Sensex edging 0.3 per cent lower, after hitting fresh 32-month highs in the day, with weak European shares and a likely lower opening in the U.S. markets also weighing on the sentiment.
Export-focused outsourcers led the losses, with the IT sector index declining 1.3 per cent, after rising 3 per cent over the three previous sessions. The 30-share BSE index dropped 0.3 per cent, or 59.83 points to 19,941.72, with half of its components losing ground, after rising as much as 0.5 per cent early to 20,105.54 points — its highest since January 2008.
“The pace at which FIIs (foreign institutional investors) are pouring money cannot continue. We cannot keep moving in one direction,” said Deven Choksey, managing director and CEO of KR Choksey Shares. Overseas investors have been gung-ho about India’s growth story and have pumped in more than $4 billion in September, pushing the benchmark index nearly 11 per cent higher this month.
“While the valuations may have run ahead of time for key indices, there is value in individual stocks. Tata Motors, ICICI Bank and Maruti hold good promise currently,” Choksey said. Foreign fund inflows this year look on course to set a new record. Net foreign portfolio investments so far this year, have already risen nearly $17 billion, adding to a record $17.5 billion in 2009, which had sparked an 81 per cent rally in the benchmark.
Outsourcers such as Tata Consultancy Services and Infosys Technologies dropped 1.9 per cent each on profit sales after the two stocks had hit record highs in the last session. IT services firm Mahindra Satyam extended gains to as much as 14.9 per cent ahead of the firm’s audited financial results review for fiscal years 2009 and 2010 on Sept 29.
It was the most traded stock on the BSE, with its volume of 49.4 million shares more than 17 times its 30-day average volume. Automobile companies rose on hopes of buoyant demand during the September-to-December festive season.