The Sensex fell for a second consecutive day on Thursday, as investors took profits on expiry of monthly derivatives amid concerns about high oil prices.
The 30-share BSE index closed down 0.37 per cent, or 66.75 points, at 18,078.50, after climbing into positive territory for some time. Eighteen of its components declined. The 50-share NSE index closed 0.4 per cent lower at 5,483.3. In the broader market, losers outpaced gainers in the ratio of nearly 2:1 on heavy volume of more than 1.2 billion shares.
“The markets were choppy because of the expiry of the derivatives contracts today,” said Neeraj Dewan, director at Quantum securities in New Delhi.
"From tomorrow the focus will be on global markets and if the US markets close higher we could have a positive opening. If the oil situation gets murky it will affect Indian markets,” he said.
India looks vulnerable to profit-taking in the short term after recent outperformance, rising oil prices, and seasonally tighter monetary conditions, UBS said in a note.
Investors are also awaiting further evidence on the health of the global economy, as high oil prices threaten to fuel inflationary pressures and increase costs for companies, affecting their profitability.
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The BSE index, which fell 1.5 per cent yesterday, is still up almost 17 per cent since the end of December on the back of a sharp rise in foreign portfolio investment.
ICICI Bank was among the leading losers, falling 1.4 per cent on profit-taking. The lender, the country's second-largest bank, is still up nearly 38 per cent in 2012.
Top lender State Bank of India rose as much as three per cent after an official said the bank has not given further loans to debt-laden Kingfisher Airlines. However, it gave up most of the gains and ended up 0.2 per cent.
Miner Sterlite Industries fell nearly four per cent on media reports that India-focused miner Vedanta is considering a move to restructure its holdings in Sterlite and Sesa Goa, potentially merging the two, dealers said.
An initial public offer by Multi Commodity Exchange (MCX) to raise up to $134 million was fully covered on Thursday, the second day of the sale, indicating investors were shifting their money to new offerings.
The first IPO by an Indian company in 2012 is seen as a test of investor appetite for share sales after weak local markets forced many companies to shelve stock offerings last year.
Other offerings in the pipeline include follow-on share sale by state-run companies Oil and Natural Gas Corp, Steel Authority of India and Bharat Heavy Electricals Ltd.
Stocks that moved
Bharat Petroleum rose 5.2 per cent on expectation of rising valuations of its Mozambique assets, dealers said.
Bearing maker SKF India fell 2.8 per cent after the company said net profit for the December quarter was more than eight per cent lower than year ago period.