* Resistance emerges after 13.4 pct jump over past 5 days
* Fall temporary, investors should buy dips - analysts
* Infosys, ICICI, TCS, ITC lead losses
* Tata Steel initially drops after GDR issue, but rebounds
(Updates with closing prices; adds details, analyst comments,
European markets performance)
By Pratish Narayanan
MUMBAI, July 21 (Reuters) - Indian shares fell 0.85 percent
on Tuesday, snapping a two-day winning streak and shrugging off
gains in global peers, as investors cashed in profits from a
13.4 percent rally over the previous five sessions.
Outsourcer Infosys Technologies (INFY.BO), private-sector
lender ICICI Bank (ICBK.BO) and diversified cigarette maker ITC
Ltd (ITC.BO) led the main index lower after it climbed 3
percent on Monday.
"The way the market has run up recently surprised
everybody, and even today, the correction has not been that
much," Gajendra Nagpal, chief executive of Unicon Financial
Intermediaries, said from New Delhi.
Leading outsourcer Tata Consultancy (TCS.BO) fell 4.5
percent to 477.40 rupees, after surging 15.3 percent on Monday
following 22 percent rise in quarterly profit that beat
estimates. [ID:nBOM352657]
Tata Steel (TISC.BO) erased losses of as much as 3.6
percent and rebounded 5.3 percent to 411.75 rupees as the
world's No. 6 steelmaker said it raised $500 million in an
issue of global depositary receipts (GDRs) at $7.644 each.
Each GDR is equivalent to one domestic share and the
pricing was done at roughly 5.4 percent discount to Monday's
close.
Traders said the stock fell at the start on equity dilution
concern, but the pricing was favourable after the stock had
jumped about 150 percent from its March low. [ID:nBOM191793]
The 30-share BSE index .BSESN ended down 128.52 points at
15,062.49, after falling 1.5 percent at one stage. Twenty-one
stocks declined.
"It is time we had a healthy correction," Ambareesh Baliga,
vice president at Karvy Stock Broking said. "Valuations had
become expensive."
The benchmark had risen 9.2 percent last week, the best
among major markets in Asia, after the government raised hopes
for financial reforms and monsoon rains, crucial to the
domestic-demand powered economy, picked up after a weak start.
There have been concerns about pricey stocks and the
domestic economy, but ample liquidity and a spike in
risk-appetite across the world on increasing hopes for a
recovery in the global economy has supported the market.
"I don't think we will see a significant fall from here as
there is too much liquidity sloshing around," Unicon's Nagpal
said.
Traders said even though short-term investors may look to
take profits, the momentum in overseas markets and bright
prospects for longer-term gains will spur investors to enter
the market at dips.
"I would advise investors not to lose focus on the India
growth story because of short-term gyrations," said Dinesh
Thakkar, chairman and managing director at Angel Broking.
"Every correction provides a wonderful opportunity to buy a
share of India's long-term potential that yet remains to be
unleashed."
The BSE index is up 56 percent this year after slumping by
more than half in 2008. It has leapt 87 percent from a 2009 low
in early March, riding a stocks rally that has swept across the
globe.
Analysts see more gains over the next 12 months, with
record low global interest rates and trillions of dollars in
stimulus spending appearing to help the world recover from the
worst recession in 80 years.
No. 2 IT-services firm Infosys eased 1.5 percent to
1,943.10 rupees, while ICICI shed 1.9 percent to 772 rupees.
ITC dropped 2.5 percent to 219.75 rupees.
In the broader market, losers marginally led gainers 1,350
to 1,303 on above-average volume of 464.7 million shares.
The 50-share NSE index fell 0.7 percent to
4,469.10.
Most other Asian and European shares were higher on
Tuesday, after upbeat company earnings reassured investors that
an economic recovery was taking root and a last-minute rescue
of U.S. lender CIT Group (CIT.N) boosted confidence.
Japan's Nikkei .N225 rose 2.7 percent, while MSCI's
measure of other Asian markets .MSCIAPJ gained 0.2 percent.
At 1018 GMT, the FTSEurofirst 300 .FTEU3 index of top
European shares was up 0.6 percent.
MAIN TOP 3 BY VOLUME
* Unitech (UNTE.BO) on 25.8 million shares
* Satyam Computer (SATY.BO) on 24.5 million shares
* Ispat Industries (ISPT.BO) on 24.4 million shares
STOCKS THAT MOVED
* IT firm MindTree Ltd (MINT.BO) fell 11.9 percent to
487.90 rupees, after the company cut its financial-year 2010
outlook on a "highly uncertain" market environment.
[ID:nBOM449074]
* Television and movie content producer UTV Software
Communications Ltd (UTVS.BO) rose 4.4 percent to 382.05 rupees
after it agreed to buy the stake it does not already own in UMP
Plc (UMP.L) as it tries to integrate its movie business.
[ID:nBNG443359]
* Era Infra Engineering (ERCI.BO) gained 3.4 percent to
138.90 rupees after the company's net profit more than tripled
in the quarter ended June.
FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee ease tracking weaker equity prices
[INR/]
* Indian bond yields bounce back on profit-booking
[IN/]
* Dollar edges up on caution ahead of Bernanke
[FRX/]
* Oil creeps above $64, awaits U.S. fuel stocks data [O/R]
* World stocks near 9-mth high on earnings hopes [MKTS/GLOB]
* Index futures point to lower Wall St open
[.N] * For closing rates of Indian ADRs
INADR (Editing by Ranjit Gangadharan)
