BSE Sensex eases; banks, Maruti drop
The BSE Sensex erased early gains and slipped 0.1% on Tuesday as investors locked in profits after a four-session rally.
January 04, 2011 / 12:40 IST
The BSE Sensex erased early gains and slipped 0.1% on Tuesday as investors locked in profits after a four-session rally.
Financials led the losses after a steller show in 2010, with the possibility of more interest rate increases by the Reserve Bank of India (RBI) to rein in accelerating inflation pressures likely to douse loan demand.Top car maker Maruti Suzuki shed more than 1% after its December sales dropped 11.8% from November, traders said.By 10:52 am (0522 GMT), the 30-share BSE index was trading down 0.13% at 20,533.90 points, with half of its components declining. It rose as much as 0.4% early.The banking sector index was down 1.5%, after rallying more than a third in 2010. "The RBI has tough choices to make tackling inflation and taking care of growth," said Sunder Subramaniam, senior manager of institutional sales at brokerage Sharekhan."There are expectations building up that we could see an interest rate hike in some time. Also, bank stocks have performed well, and there is some profit booking."State Bank of India, the country's top lender, and rivals ICICI Bank and HDFC Bank were down between 1.8% and 1.9%.The main BSE index had risen 17.4% in 2010, powered by record foreign fund investments of USD 29.3 bn. Traders said investors would be watching the inflow for direction. Maruti, which accounts for every second new car sold in India, said December sales rose 17% from the same month a year earlier but were lower than in November. Analysts had warned that the pace of car sales in rapidly growing Indian market would slow against high comparisons, a limited supply of components and rising interest rates. Maruti was down 1.2% at Rs 1,411.25. "The stock is just reacting to the sequential fall in sales numbers," said Subramaniam.Non-ferrous metals producer Sterlite Industries rose 1.4% on bullish metal prices. Copper futures opened at a record high in London, chasing a rally in New York which touched an all-time peak in the previous session, buoyed by positive manufacturing data from around the world. Energy giant Reliance Industries, which had underperformed the Sensex in 2010 and posted a near 3% decline, edged 0.8% higher.In the broader market, losers almost matched the number of gainers on volume of 186 million shares. The 50-share NSE index was down 0.2% at 6,148.30.Stocks on the move* MOIL Ltd and Jubilant Lifesciences rose 0.3% and 0.6% respectively after the Bombay Stock Exchange said it would add the stocks to the BSE-500 index from January 10. * Textile firm SEL Manufacturing Co Ltd rose 0.4% to Rs 25.30 after its board approved raising funds by issuing 20 million warrants on a preferential basis to its founders. Main top three by volume* Suzlon Energy on 8.2 million shares* Ravi Kumar Distilleries on 3.6 million shares* Prime Focus on 3.4 million shares Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
