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Indian shares mark weakest start since 2011; IT stocks hit
January 7, 2014 / 8:32 PM / 4 years ago

Indian shares mark weakest start since 2011; IT stocks hit

MUMBAI (Reuters) - Indian shares fell for a fifth consecutive session on Tuesday to mark their weakest start to a year since 2011, as technology stocks, including Infosys Ltd, dropped on caution ahead of the software exporter’s quarterly results on Friday.

People watch a large screen displaying India's benchmark share index on the facade of the Bombay Stock Exchange (BSE) building in Mumbai December 9, 2013. REUTERS/Mansi Thapliyal

Concerns that foreign investors are becoming more selective are also weighing on sentiment, after their $20 billion worth of net purchases last year helped boost domestic shares.

Foreign institutional investors (FIIs) sold 10.04 billion rupees ($161 million) worth of index futures and 3.33 billion rupees worth of cash shares over the previous two sessions. However, they still remain net buyers of 7.37 billion rupees of cash shares so far this year.

Losses also tracked Asian shares that fell to a near four-month low on Tuesday on disappointing U.S. services sector data that raised concerns about stuttering growth in the world’s largest economy. <MKTS/GLOB>

Markets are expected to remain range-bound ahead of Infosys Ltd’s (INFY.NS) third quarter earnings, informally kicking off the results season, and key inflation data next week.

“The Sensex (India’s BSE benchmark index) would remain in a range of 500-600 points for the time being as fiscal problems remain a drag, even as inflation data may surprise positively,” said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.

The benchmark BSE index .BSESN fell 0.45 percent, or 94.06 points, to end at 20,693.24, marking its lowest close since December 17.

The index has fallen 2.2 percent this year, registering a loss in each of the five trading sessions so far. That would make it the weakest start since a 4 percent fall over the first five sessions of 2011.

The broader NSE index .NSEI lost 0.47 percent, or 29.20 points, to end at 6,162.25, approaching 6,100 which has been a key technical support five times since January 2013.

Technology shares fall on caution ahead of Infosys earnings. Infosys fell 1.7 percent, Tata Consultancy Services Ltd (TCS.NS) ended down 1.5 percent, while Wipro Ltd (WIPR.NS) lost 1.4 percent.

Among shares of other blue chips, Axis Bank Ltd (AXBK.NS) fell 1.8 percent, while Tata Motors Ltd (TAMO.NS) ended lower 0.5 percent.

Power producers slumped for a second day on media reports that the state government in Maharashtra, home to Mumbai, was planning to cut power tariffs.

Tata Power Co Ltd (TTPW.NS) fell 2.8 percent, adding to a 2.6 percent decline in the previous session, while Reliance Infrastructure Ltd (RLIN.NS) ended lower 1.7 percent. It fell 0.5 percent on Monday.

Among the gainers, tire makers rose on expectations of higher margins as the key Tokyo Commodity Exchange rubber contract hit a five-week low on Tuesday, weighed down in part by weak Chinese services sector data.

Apollo Tyres Ltd (APLO.NS) rose 0.4 percent, Ceat Ltd (CEAT.NS) gained 0.3 percent and Goodyear India Ltd (GDYR.BO) advanced 0.8 percent.

ICICI Bank Ltd (ICBK.NS) also gained 0.9 percent on value-buying after falling nearly 5.3 percent over the previous four sessions, dealers said.

Editing by Prateek Chatterjee

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