Sensex edges lower on profit-taking; blue-chips drag

By Indulal PM

MUMBAI (Reuters) - The BSE Sensex edged lower on Friday after setting records in each of the previous four sessions as investors took profits in recent outperformers such as State Bank of India, with caution also prevailing ahead of monthly U.S. jobs data.

Expectations for earlier-than-expected interest rate cuts, hopes for additional government reforms, and a pick-up in foreign buying after a recent stall had all combined to spark the latest rally in shares.

The Sensex ended flat this week, marking a third straight week of gains, having breached 28,000 points for the first time on Wednesday, although it has not been able to close above that level.

 

Markets are now looking ahead at U.S. employment data, which could help set expectations for when the Federal Reserve will raise U.S. interest rates.

"There is pressure due to profit-taking, but fresh money is coming. FIIs are continuously buying and we do expect the downside is capped for the near-term. Any fall will give investors a better opportunity to enter at better valuation," said Suresh Parmar, head, institutional equities at KJMC Capital Markets, adding that it's still a buy-on-dip market.

The benchmark index closed 0.17 percent down at 27,868.63 points.

The broader Nifty closed down 0.02 percent at 8,337 points, but gained 0.2 percent for the week.

Banking stocks led the decline. Shares in State Bank of India fell 1.42 percent after gaining 5.2 percent in the last four sessions. HDFC Bank ended 1.5 percent lower.

Hero MotoCorp fell 2.6 percent after Bain Capital sold part of its stake. Sources told Reuters the U.S. private equity fund had sold 8.5 million shares in the company to raise $400 million.

Pharmaceutical companies were among the gainers. Dr Reddy's gained 4.46 percent to a record high after U.S. Food and Drug Administration said it has granted final approval to the company to make cheaper copies of Roche Holding AG's antiviral Valcyte.

Shares in DLF Ltd ended up 6.1 percent after an appeals court on Wednesday allowed it to redeem 18.06 billion rupees ($293.96 million) in mutual fund investments.

Shares in Financial Technologies closed 1.6 percent higher after it sold stake in Indian Energy Exchange to multiple investors.

(Editing by Sunil Nair)