Sensex ends marginally lower a day ahead of derivatives expiry

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex edged down on Wednesday as software services exporters such as Infosys were hit by a strengthening rupee, while broader sentiment remained weak due to recent selling by foreign investors.

Foreign funds were sellers of 3.39 billion rupees in domestic cash shares and 7.80 billion rupees in equity derivatives on Tuesday, exchange data shows. FIIs have pumped a net $6 billion into cash shares since late August, helping the benchmark BSE index <.BSESN> hit a record high on November 3.

Waning risk appetite from foreign investors is reviving concerns about India's vulnerability when the Federal Reserve begins to taper its monetary stimulus given the country's dependence on overseas flows to bridge its current account deficit.

 

Caution continues to prevail ahead of the expiry of November derivatives contracts on Thursday and gross domestic product and fiscal deficit data on Friday.

"Market is no mood to react on data. It's more a question of liquidity. Election results might swing the mood for a bit but liquidity would be key to watch for long term," said Phani Sekhar, fund manager at Angel Broking.

The benchmark BSE index fell 0.02 percent, or 4.76 points, to end at 20,420.26, marking its second consecutive day of losses.

The broader NSE index <.NSEI> fell 0.03 percent, or 2 points, to end at 6,057.10.

Software service exporter shares fell after the rupee strengthened to a one-week high against the U.S. dollar tracking gains in a euro currency that gained after German Chancellor Angela Merkel's conservatives reached a deal with Social Democrats on forming a grand coalition.

Infosys Ltd fell 0.7 percent, Wipro Ltd lost 1.1 percent, while Tata Consultancy Services Ltd also ended 0.4 percent lower.

Some bank shares also fell on profit-taking. State Bank of India ended 1.2 percent lower, while Yes Bank Ltd ended 1.7 percent down.

Among other decliners, Wockhardt Ltd slumped 8.3 percent after the U.S. Food and Drug Administration imposed an "import alert", effectively a ban, on a domestic plant operated by the Indian generic drug maker.

Maruti Suzuki India Ltd ended 0.2 percent lower after the company said it will recall 1,492 vehicles.

State-run Power Grid Corp of India's fell 2.2 percent on stock supply concerns ahead of the sale of its shares valued at about $1.2 billion likely to open on December 3.

However, among gainers, some sugar companies surged after Prime Minister Manmohan Singh set up a committee on Tuesday under the chairmanship of agriculture minister to look into how to give help to struggling sugar mills.

Bajaj Hindusthan Ltd rose 1.8 percent, while Shree Renuka Sugars Ltd ended 1.2 percent higher.

(Editing by Sunil Nair)