Indian shares dropped after a firm start on Monday, with investors wary as the market neared a key resistance level but refinery stocks climbed on the back of lower crude oil prices.
The 30-share BSE index was down 0.5 per cent at 11,859.94 points by 10:45 am (0515 GMT), after rising as high as 11,971.60. In the broader market, gainers beat losers 1,068 to 781 on moderate volume of 47 million shares. "There is no other trigger visible now except lower crude prices," said a dealer. "We can't see enough participation from the retail side."
The BSE index has gained nearly 27 per cent this year, helped by foreign fund inflows of more than $4 billion in Indian equities. However, the benchmark has not crossed 12,000 since early May.
Top state-run refiner Indian Oil Corp Ltd. like rose 2 per cent to 525.35 rupees, Bharat Petroleum Corp Ltd was up 1.4 per cent at 393 rupees, while Hindustan Petroleum Corp Ltd gained 1.4 per cent to 309.25 rupees.
India imports about 70 per cent of its oil, but domestic fuel prices are set below world prices by the government to keep inflation in check. The state-run refiners are given bonds by the government to partly compensate for their losses.
Oil prices were trading below $66 a barrel on improved supply situation in the United States and signs of easing tension over Iran's nuclear programme.
Kochi Refineries Ltd was up 2.7 per cent at 171 rupees. But petrochemicals giant Reliance Industries Ltd., which also runs a large refinery, lost 0.5 per cent to 1,124.90 rupees. The 50-issue Nifty index was down 0.5 at 3,453.55 points.