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Indian shares reverse three-day rally on profit taking
Wednesday, 13 August 2003, 19:30 IST
MUMBAI: India's blue-chip share market index finished in the negative zone Tuesday, reversing a three-day losing streak, as institutional investors pocketed gains after a bull run in the last three consecutive sessions.
The market opened the trading session on a positive note and surged higher in the early trade on buying in shares of technology companies following an overnight rally on the tech-laden Nasdaq stock exchange.
Buying in stocks of steel companies on hopes of an increase in price of the commodity soon also boosted the market sentiment.
The market, however, failed to hold on to its early gains and slipped in the negative zone in the second half of the trading session with investors rushing to take profit in select old as well new economy stocks.
Reflecting the bearish sentiment, the market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed at 3,889.41, a loss of four points or 0.10 percent from its previous session's close.
"The market is finally entering into a consolidation phase after the bull run in the last few weeks' trade. The market movement will be restricted within a range in the days ahead," said a broker with the Bombay Stock Exchange.
"Though the downturn will not be very huge because the overall market fundamentals are still very strong, the correction is likely to keep the investor mood subdued for a while," the broker added.
Traders say institutional profit taking in shares of heavyweight technology companies was triggered by sustained rise in the value of the Indian rupee against the U.S. dollar.
Indian software makers earn around 70 percent of their export earnings from the U.S. and a sharp rise in the value of the rupee against the dollar threatens to hit the profitability of the companies.
The rupee inched closer towards a three-year high Tuesday by ending at 45.87/88 per dollar. The Indian currency has gained 4.5 percent in 2003. It is likely to rise further in the days ahead on strong foreign investment inflows.
Commerce and Industry Minister Arun Jaitley, however, said Tuesday that the country's export performance in the current financial year has been satisfactory despite a hardening rupee.
The sentiment on technology counters was also dampened by reports that U.S.-based multinational General Electric plans to re-negotiate the billing rates for its Indian IT vendors in September.
The re-negotiation may entail a change in most existing vendor contracts to fixed price, from the time and material contracts at present.
In the technology sector, Hyderabad-based Satyam Computer gained 3.4 percent to touch 
196.90 on institutional selling pressure after a brief rally in the early trade.
HCL Technologies, a New Delhi-based software development and services major, fell 2.8 percent to 168.45 and Infosys Technologies, India's largest listed software exporter, ended 2.1 percent lower at 3,404.50.
In the old economy sector, Associated Cement Companies closed with a loss of nearly two percent at 202.10, and Larsen and Toubro declined 1.8 percent to 269.05 on selling pressure after recent gains.
Other major losers in the sector included Gujarat Ambuja Cements, Grasim Industries, Cipla, Dr. Reddy's Laboratories, Reliance Industries, State Bank of India, Castrol India and state-run Hindustan Petroleum Corporation.
Source: IANS
196.90 on institutional selling pressure after a brief rally in the early trade.
HCL Technologies, a New Delhi-based software development and services major, fell 2.8 percent to 168.45 and Infosys Technologies, India's largest listed software exporter, ended 2.1 percent lower at 3,404.50.
In the old economy sector, Associated Cement Companies closed with a loss of nearly two percent at 202.10, and Larsen and Toubro declined 1.8 percent to 269.05 on selling pressure after recent gains.
Other major losers in the sector included Gujarat Ambuja Cements, Grasim Industries, Cipla, Dr. Reddy's Laboratories, Reliance Industries, State Bank of India, Castrol India and state-run Hindustan Petroleum Corporation.
Source: IANS