Indian shares fell 0.9 percent on Thursday as investors locked in profits after the main index climbed to a 33-month high in early trade, but the undertone remained upbeat on sustained foreign buying. Outsourcers mostly rose with blue chip Infosys Technologies, the No 2 software services exporter, climbing to an all-time peak ahead of quarterly earnings due before the market opens on Friday.
Engineering and construction conglomerate Larsen & Toubro, ICICI Bank, State Bank of India, HDFC Bank and Housing Development Finance Corp shed ground after posting big gains this year. "Some profit booking was expected after such a run up, but there is no big concern in the market for now," said Neeraj Dewan, director of Quantum Securities. The 30-share BSE index closed down 0.92 percent, or 190.24 points, at 20,497.64 points, with 25 of its components losing ground. It had hit 20,854.55 early, just around 350 points from a record high of 21,206.77 reached on January 10, 2008.
Citigroup estimated companies, excluding oil firms, in the index would post annual earnings growth of more than 40 percent this year, with quarter-on-quarter rise of 9 percent. Foreign funds have invested a record $21.8 billion in Indian equities so far this year, and helped the benchmark index rise 17.4 percent. Infosys gained as much as 2.4 percent to a record high of 3,228 rupees while smaller rival Wipro firmed as much as 3.6 percent to 499.90 rupees, its highest in a decade.
Brokerages expect Infosys will raise its outlook for dollar revenue growth to 21-24 percent for this fiscal year from 19-21 percent forecast in July. The banking sector index shed 1.1 percent, but is still up 42.8 percent in the year to date. State Bank of India dropped 1.3 percent, while ICICI Bank and HDFC Bank declined 1.8 percent and 0.9 percent respectively. HDFC shed 1.1 percent. Larsen & Toubro dropped 3.2 percent, after rising 4 percent in the previous session. Provisional data showed declining shares outnumbered advancing ones in a ratio of 1.6:1 on relatively heavy volume of 647 million shares. The 50-share NSE index closed 0.9 percent lower at 6,177.35 points.