BSE Sensex inches higher; pharma, tech stocks gain

By Indulal PM

MUMBAI (Reuters) - The BSE Sensex edged higher on Wednesday, to post its sixth gain in seven sessions as drugmakers such as Sun Pharmaceutical and software services exporters such as Tata Consultancy Services recovered from recent steep losses.

Still, the mild gains on Wednesday, combined with the falls on Tuesday, signal the momentum for a record setting rally is waning, as investors book profits across a number of shares that have recently surged.

A key indicator of whether the rally can sustain was due after market hours, when India is due to post consumer inflation and industrial output data.

Easing retail prices would likely cement expectations the Reserve Bank of India would keep interest rates steady at its policy review on April 1 after aggressively tightening monetary policy from September to January.

 

"We have been seeing buying interest from overseas investors and supply is still in the market," said Suresh Parmar, head, institutional equities at KJMC Capital Markets.

"However, one should be careful in picking stocks," he added. "There are enough buying opportunities and at the same time we may see further selling pressure in metals and iron ore stocks."

The Nifty rose 0.08 percent, or 5 points, to end at 6,516.90, hovering near an all-time high of 6,562.85 hit on Tuesday.

The Sensex edged up 0.14 percent, or 29.80 points, to end at 21,856.22, not too far from a record high of 22,023.98 hit on Monday.

Foreign investors bought Indian shares worth 14.71 billion rupees on Tuesday, their 17th buying over the previous 18 sessions for a total of over $1.8 billion.

Exchange data shows foreign investors were net sellers on Monday, although traders say that the day was impacted as investors tendered shares as part of GlaxoSmithKline's open offer to increase its stake in the domestic unit to 75 percent from 64 billion rupees.

Among the top gainers on Wednesday were recent under-performers.

Sun Pharmaceutical Industries gained 4.14 percent, its biggest single day gain since October 9, 2013, after slumping 7 percent over the previous four sessions.

Dr Reddy's Laboratories rose 0.33 percent.

Technology stocks, which went from top performers last year to struggling in recent weeks as the rupee recovered, were other strong gainers on Wednesday.

Tata Consultancy Services added 1.29 percent, but it is still down 4.3 percent for the month, compared with a 3.8 percent gain in the Nifty so far in March.

Wipro closed 1.23 percent higher.

But investors also continued to book profits in other recent gainers.

Shares in Oil and Natural Gas Corp fell 1.9 percent on profit-taking after gaining 8.8 percent so far this month.

Metal stocks continued to witness selling pressure for the third consecutive day with Tata steel losing 1.21 percent on continued concerns about China's growth prospects.

Hindalco Industries closed 2.26 percent down.

Shares of L&T Finance Holdings and Just Dial gained after their inclusion into the futures and option segment of the NSE.

(Editing by Anand Basu)