BSE Sensex falls from three-week highs

By Himank Sharma

MUMBAI (Reuters) - The BSE Sensex fell on Monday, retreating from a three-week closing high in the previous session, as investors booked profits in 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 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 percent this year, having hit a record high on December 9, compared with a 25.7 percent gain last year.

"Markets are likely to remain flattish, although some activity is expected due to NAV adjustments (by funds), but broadly markets are not likely to show any major fireworks," Sudip Bandyopadhyay, chief executive of Destimoney Securities Pvt Ltd said.

The Sensex fell 0.24 percent to end at 21,143.01, after hitting a three-week closing high on Friday.

The Nifty fell 0.36 percent to close at 6,291.10.

Investors booked profits in India's software services companies, with Infosys falling 1.66 percent to 3,502.35 rupees, after hitting a record high of 3,575 rupees.

Tata Consultancy Services fell 0.21 percent.

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

The NSE IT index is up 56.9 percent 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 289 rupees per bag this month from 304 rupees 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 percent, while Larsen & Toubro ending 1.29 percent 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 percent, Titagarh Wagons closed 9.98 percent higher, Texmaco Rail & Engineering rose 12.5 higher and Hind Rectifiers ended up 12.23 percent.

Trent rose 1.99 percent 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 percent higher after the miner said a committee appointed by the Supreme Court had allowed it to resume mining activities in Karnataka.

(Editing by Anand Basu)