MUMBAI (Reuters) – The BSE Sensex met with resistance after climbing to its highest level in 25 months early on Tuesday, while export-driven outsourcers extended their drop on a strong rupee.
By 10:19 a.m., the 30-share BSE index was up 0.04 percent at 17,942.24, with 14 of its components gaining, after hitting 17,988.89, its highest since Feb. 27, 2008.
The benchmark had risen 6.7 percent in March and is up 2.7 percent this year after jumping 81 percent in 2009.
“There is resistance as we are moving to higher levels,” said Kunal Sukhani, manager of institutional equities at Asian Markets Securities. “People are using this rally as an opportunity to book profits.”
Foreign funds have moved a net $4.7 billion into Indian stocks so far in 2010, with around $4.4 billion arriving in March. A part of these flows were absorbed by primary market offerings.
Outsourcers that get most of their revenue from exports were weighed down by the rupee that strengthened to 19-month-high against the dollar on Monday and looked to climb further, which could squeeze profit margins of the companies.
Top outsourcer Tata Consultancy Services was down 0.7 percent and rivals Infosys Technologies and Wipro dropped 0.8 percent and 0.7 percent respectively.
Tata Steel, the world’s eighth-largest steel maker by output, eased 0.3 percent after gaining more than 7 percent over the previous two sessions.
Sukhani said market participants were optimistic about March quarter corporate results that would start from next week.
“Nothing has changed. Overall, the scenario looks positive,” he said.
Financials edged higher on promising long-term outlook. Sector leader State Bank of India rose 0.1 percent and ICICI Bank climbed 0.5 percent.
Energy giant Reliance Industries, which has the highest weight on the Sensex, dipped 0.1 percent to 1,124.35 rupees.
Engineering and construction firm Jaiprakash Associates dropped 0.9 percent after rising more than 3 percent over two sessions.
In the broader market, gainers were nearly double the number of losers on volume of 133 million shares.
The 50-share NSE index was down 0.1 percent at 5,362.65.
* State-run oil marketing companies such as Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum rose between 0.8 percent and 1.1 percent as crude prices slipped from 18-month highs.
These companies are forced to sell fuel products at mandated discounts.
* IT firm Persistent Systems debuted at a 37 percent premium to its issue price of 310 rupees. The stock erased some early gains and was trading at 420.55 rupees.
* Persistent Systems at 4.4 million shares
* Shree Ashtavinayak on 3.1 million shares
* Spicejet on 2.7 million shares
(Reporting by Ami Shah; Editing by Ranjit Gangadharan)
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