Sensex falls from 3-week high

The BSE Sensex fell on Monday, retreating from a three-week closing high in the previous session, as investors booked profits in information technology (IT) bellwethers, including Infosys, while cement makers declined on concerns about subdued construction activity.

With only one more session left in the year, Indian stocks are set to post their second successive annual gain, as strong foreign buying this year offset tepid demand from domestic investors and sustained redemptions from mutual funds.

Foreign institutional investors (FIIs) have been buyers for seven consecutive sessions, regulatory and exchange data shows, taking their total investment in Indian equities to $20.1 billion so far this year.

The Sensex index is up 8.4 per cent this year, having hit a record high on December 9, compared with a 25.7 per cent gain last year.

The Sensex fell 50.57 points, or 0.24 per cent, to end at 21,143.01, after hitting a three-week closing high on Friday. The Nifty fell 22.70 points, or 0.36 per cent, to close at 6,291.10.

Investors booked profits in India's software services companies, with Infosys falling 1.66 per cent to Rs 3,502.35, after hitting a record high of Rs 3,575. Tata Consultancy Services fell 0.21 per cent.

Software exporters have rallied this year aided by a weak rupee coupled with strong recovery in their core US market.

The NSE IT index is up 56.9 per cent for the year.

Cement stocks, including ACC and Ambuja Cements also closed lower on concerns about declining cement prices.

ICICI Securities estimates average prices for cement settled at Rs 289 per bag this month from Rs 304 last month, according to a report from its retail unit ICICI direct.com.

Property developers and infrastructure companies tracked the fall in cement stocks, with DLF sliding 3.18 per cent, while Larsen & Toubro ending 1.29 per cent lower.

Among gainers, wagon and railroad infrastructure builders rose after Business Standard newspaper reported the government could allow foreign direct investment in the railway sector, citing an unnamed senior government official.

Kalindee Rail Nirman Engineers jumped 19.94 per cent, Titagarh Wagons closed 9.98 per cent higher, Texmaco Rail & Engineering rose 12.5 higher and Hind Rectifiers ended up 12.23 per cent.

Trent rose 1.99 per cent on anticipations ahead of government approval on Tesco Plc's proposal to invest $110 million to set up supermarkets in the country.

Sesa Sterlite ended 0.72 per cent higher after the miner said a committee appointed by the Supreme Court had allowed it to resume mining activities in Karnataka.