* BSE index falls 0.68 pct; NSE index down 0.56 pct
* Recent outperforms such as Reliance, SBI fall
* FIIs sell for second session in three
By Indulal PM
MUMBAI, May 27 India's NSE index fell for a
second consecutive session as investors continued to book
profits in recent outperformers such as State Bank of India
while they wait for actual policies from Prime Minister
Narendra Modi and his new cabinet.
Arun Jaitley, who was named as India's new finance minister,
committed himself on Tuesday to repairing public finances and
restoring investor confidence. The close party colleague of Modi
will also share the defence and corporate affairs portfolios,
although only temporarily.
The new government will need to meet high investor
expectations, as prospects of a victory by the Bharatiya Janata
Party had sent the NSE index up by 25.8 percent to record highs
since Modi was named as the prime ministerial candidate for the
opposition party in mid-September.
Overseas investors have been especially strong buyers of the
rally, but sold a net $14.3 million on Monday, their second
session of sales in three, according to provisional exchange
"Market is getting into some sort of correction mode now
after the election rally. Now the optimism needs to be matched
with the fundamentals. I think market will start counting for
the next events such as (macro) policy announcements and RBI
policy," said Deven Choksey, managing director, KR Choksey
The broader NSE index closed 0.56 percent lower at
7,318 points, marking only its third daily fall this month.
The benchmark BSE index fell 0.68 percent at
Shares in State Bank of India fell 2.7 percent,
adding to their 1.9 percent fall on Monday.
Lenders, especially public sector ones, have been big
beneficiaries of the recent rally given expectations they are
primed to benefit from a recovering domestic economy. SBI has
gained 48.85 percent so far this year.
Other outperformers also fell. Reliance Industries Ltd
closed 1.25 percent lower and Bharat Heavy Electricals
Ltd ended down 5.2 percent.
Mid-caps, which recently posted strong gains, also slumped.
Unitech Ltd, which gained 77 percent in May, fell 6.6
Shares in Gail India Ltd fell 7.5 percent after
its earnings missed some analysts' expectations. GAIL's
January-March net profit rose by 57 percent to 9.72 billion
rupees ($165.36 million), and Jefferies said factors including a
weak demand environment and subsidy burdens impacted GAIL's
earnings, according to a note to clients on Tuesday.
Shares of sugar refiners slumped as sugar futures
fell to their lowest in 10 weeks on sluggish demand from bulk
consumers ahead of the monsoon season.
However, investors also picked up shares that
under-performed the rally, such as exporters that were seen as
vulnerable to a stronger rupee
Shares in Infosys Ltd gained 1.27 percent, but
were still down 1.5 percent this month, while Dr Reddy's
Laboratories Ltd gained 0.5 percent, but was down 14.6
percent so far this month.
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FACTORS TO WATCH
* Dollar on weaker footing as euro steadies
* Oil above $110 on Ukraine, Libya supply worries
* World shares hover near all-time high
* Foreign institutional investor flows
* For closing rates of Indian ADRs
ASIA-PACIFIC STOCK MARKETS:
Pan-Asia........ Japan....... S.Korea...
S.E. Asia....... Hong Kong... Taiwan....
Australia/NZ.... India....... China.....
Wall Street .... Gold ....... Currency..
Eurostocks..... Oil ........ JP bonds...
ADR Report ..... LME metals. US bonds..
Stocks News US.. Stocks News Europe
DIARIES & DATA:
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U.S. earnings diary European diary
Indian diary Wall Street Week Ahead
Eurostocks Week Ahead
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(Editing by Sunil Nair)