Indian shares eased 0.1 percent on Thursday, dropping for a third day as investors took a breather after a steep rise in March, but robust foreign fund inflows affirmed a bullish undertone. Small- and mid-cap stocks climbed as they tried to catch up with the rally in the large-caps last month, and this helped gainers beat losers in the ratio of 1.9 to 1 in the broader market.
Energy explorer Cairn India fell 2 percent after approval for Vedanta Resources' deal to buy majority stake in the unit of Cairn Energy for about $9.6 billion was further delayed. On Wednesday, the government deferred a decision on the deal by referring it to a panel of ministers for further review, and Cairn Energy and Vedanta on Thursday also extended the deadline.
The 30-share BSE index closed down 0.11 percent or 21.02 points at 19,591.18, with 17 of its components losing ground. The small-cap and the mid-cap rose 1.25 percent and nearly 1 percent respectively. The 50-share NSE index dropped 0.1 percent to 5,885.70 points. Around 329 million shares were traded on the BSE, better than the 30-day daily average volume of 292 million shares.
The benchmark BSE index had rallied 9.1 percent in March, notching its biggest gain in six months. Foreign funds have pumped around $2.8 billion into equities since the start of March, after being net sellers in the first two months, on hopes a market correction made the market attractive given economic growth was still robust. Maruti Suzuki dropped 1.2 percent after the top car maker said late on Wednesday it would recall 13,157 diesel engine cars.
Analysts said the fall in prices was a knee-jerk reaction as the recall would hardly cause any financial impact for the company that sells more than 120,000 vehicles a month. Profit-taking pushed outsourcers lower. The sector index shed 0.7 percent, but is up 8.2 percent since the start of March. Leading software firms Tata Consultancy Services and Infosys Technologies fell 2 percent and 0.7 percent respectively, while Wipro bucked the trend and closed 1.2 percent higher.
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