India's stock market took a breather on Wednesday after a 10-day rally, which saw it scale a new peak earlier. The 30-share BSE index ended down 0.05 percent at 8,189.48 points, having gained more than 24 percent in 2005 on net foreign fund investment of $8 billion, compared with $8.5 billion for all of 2004.
"This could be the beginning of the long-overdue correction. This has been a liquidity-driven rally, but valuations are looking stretched, and there are some negative triggers, such as concerns about the US economy and oil prices," said Mitesh Mehta, vice president of equity sales at LKP Shares.
Analysts are uncertain about the impact Hurricane Katrina may have on corporate profits and consumer spending in the world's biggest economy. The United States is the biggest market for India's booming software services industry.
Software firms slipped on concerns that slower US economic growth would crimp corporate profits. Top software exporter Tata Consultancy Services fell 1.3 percent and Satyam Computer Services slipped 0.7 percent.
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