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Markets pare early gains, IT weighs

Benchmark share indices pared most of their early gains in noon trades weighed down by selling pressure in IT majors and index heavyweight Reliance Industries.

SI Reporter Mumbai
Last Updated : Sep 16 2013 | 12:59 PM IST
Benchmark share indices pared most of their early gains in noon trades weighed down by selling pressure in IT majors and index heavyweight Reliance Industries.

At 12:50pm, the BSE Sensex was down 41 points at 19,692 after hitting a high of 20,086 while the NSE Nifty was down 26 points at 5,826 after hitting a high of 5,957.

The broader market also pared early gains and turned negative with BSE Mid-cap index down 0.4% and Small-cap index down 0.2 per cent.

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Traders said that the downgrade of Indian shares by HSBC to to "underweight" from "neutral", citing the recent rally and downside risks to growth.

The bank said that after the recent bounce, India looks relatively expensive and is most exposed to growth adjustments. HSBC added that it expects GDP forecasts to decline and earnings growth forecasts to follow.

Meanwhile, August WPI rose at the fastest pace for six months in August, driven by an 18% jump in food prices, a reminder of the economic pressure new central bank governor Raghuram Rajan faces ahead of his first policy meeting this week.

The Wholesale Price Index (WPI) based inflation rose to a six-month high of 6.1%  in August against 5.79 in July, according to the data released by Ministry of Commerce and Industry today.

Most Asian share indices were trading higher with Lawrence Summers deciding not to contest for the post of heading US Federal Reserve, while progress on Syria also shored up risk appetite.

In Asia, the Nikkei ended up 0.1% while Hang Seng and Straits Times were up over 1.3% each. Meanwhile, Shanghai Composite pared early gains and was down 0.2%.

The rupee rallied to a near one-month high on Monday, with stocks and bonds joining in, as hopes for a prolonged easy monetary policy in the US boosted emerging markets. However, traders said domestic concerns such as inflation and decade-low economic growth were likely to cap extended gains. The rupee was trading at Rs 62.60 up against Friday's close of 63.48/dollar.

Most of the sectoral indices were in the red led by BSE Healthcare, IT, Realty, Metal and Capital Goods indices which were down 1.1-2.1%. However, Bankex was up 1.2% and Power index was up 0.05%.

Among other shares, Ranbaxy Labs continues to witness selling pressure and slumped 29% to Rs 326 on reports that the US Food and Drug Administration (USFDA) issued import alert on the company’s Mohali unit. After the problems at Paonta Sahib and Dewas, the USFDA now has a problem per se with its unit at Mohali, added report.

HCL Technologies has dipped over 5% to Rs 990 on reports that the information technology company will merge system integration and services business of HCL Infosystems with itself.
Sales teams at HCL Technologies and HCL Infosystems, owned by Shiv Nadar-promoted HCL Corporation, have started working closely for new technology service contracts in India and the Middle East, reviving talk of a possible integration, the Economic Times report suggests.

Market breadth has turned negative with 1,114 losers and 967 gainers on the BSE.

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First Published: Sep 16 2013 | 12:56 PM IST

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