Indian shares finish in negative zone

Thursday, 23 December 2004, 08:00 Hrs
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MUMBAI: India's benchmark share market index ended in the negative zone Wednesday, after touching a new all-time closing high in the previous session on institutional profit booking at higher levels.

Dealers said the stock market opened for the day with a positive gap, after ending with smart gains in the previous two consecutive sessions on sustained institutional buying interest.

The stock market index touched a record high in intra-day trade as investors rushed to pick up heavyweight equities on hopes of robust corporate earnings growth in the October-December quarter.

The market, however, failed to maintain its gaining momentum for long and the index slipped into the negative zone in the second half of the trading session on institutional profit taking.

Mirroring the cautious market sentiment, the stock market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed at 6,413.66, a loss of 37.64 points or 0.58 percent from its previous session's close.

"Although the overall stock market sentiment continues to be very bullish, the market ended in the red today on profit taking at higher levels," said Deepak Shah, an equity market analyst with brokerage firm Pranav Securities.

"The stock market is likely to stage a recovery soon with investors betting on impressive earnings growth of most of the blue-chip new and old economy companies," Shah told IANS.

Hopes of robust economic growth and corporate profits in the current fiscal are encouraging foreign funds to increase their allotment for this market. Many new overseas funds are exploring the possibility of investing in India.

Foreign funds have collectively put a record over $8.5 billion into the Indian capital market in the current calendar year, up from $6.5 billion worth of inflows in the corresponding period of the previous year.

A slew of overseas fund managers are looking to make their fortune in India as Asia's fourth largest economy sheds its decades of casino like stock trading practices in favour of world-class regulatory systems.

Adoption of stringent corporate governance norms by companies and easier investment guidelines are helping foreign institutional investors to loosen their purse strings in India.

India's economy is projected to expand by 6.5 percent in the current fiscal year ending March 31, 2005.

Though the projections are lower than previous year's 8.2 percent growth, experts say India would continue to rank in the list of fastest growing economies globally.

In the old economy sector, shares of cement firms like Grasim Industries lost 2.3 percent to touch 1,280.50, Gujarat Ambuja Cements was down 2.2 percent at 385.90 and Associated Cement Companies fell 1.1 percent to 316.20.

Index heavyweights such as State Bank of India closed with a loss of 1.5 percent at 594.15, consumer goods giant Hindustan Lever was down nearly one percent at 143.10 and tobacco giant ITC ended 0.5 percent lower at 1,303.50.

In the tech sector, Hyderabad-based Satyam Computer lost 2.4 percent to touch 407, Wipro ended 1.8 percent lower at 755.95 and Infosys Technologies, India's second largest software exporter, was down 1.6 percent at 2,083.20.

Source: IANS
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