In volatile trade, the BSE Sensex rose to day's high of 21,207.89 but frittered away most gains to end at 21,101.03, a rise of 21.31 points, or 0.10 per cent. The gauge had surged 371.10 points on Friday.
Twenty one constituents, including ITC Ltd, ICICI Bank and Oil & Natural Gas Corp (ONGC), rose in the 30-share index. However, Infosys that fell 2.3 per cent, HDFC Bank (1.2 per cent down) and TCS (0.5 per cent down) accounted for nearly 90-point drop in BSE Sensex.
Brokers said apart from profit-booking at higher levels, RBI Governor Raghuram Rajan's comment that nobody should doubt the central bank's desire to fight inflation, also led to selling.
The 50-share NSE index Nifty closed 10.25 points up, or 0.16 per cent, at 6,284.50. Also, SX40 index, the flagship index of MCX-SX, closed 33.67 points up at 12,559.21.
Sectorally, the BSE Realty sector index gained the most today by rising 3.16 per cent, followed by Metal index (1.52 per cent), Capital goods index (1.30 per cent) and Power index (0.93 per cent).
However, BSE IT and TECK fell. "Infosys saw a sentimental impact after the company announced the exit another senior management personnel. IT stocks are trading in overbought zone and a correction in the near term can't be ruled out," said Milan Bavishi, Head Research, Inventure Growth and Securities.
In broader markets, United Spirits fell over 3 per cent after after a court last week ordered the annulment of sale of United Breweries Holdings' (UBHL) stake in United Spirits to Diageo.
Globally, major Asian markets closed higher. European indices were also trading higher in early trades.
Gaurang Shah, Assistant Vice President, Geojit BNP Paribas Financial Services Ltd:
Markets continued their upward move for the large part of the day following the Friday’s closing. Profit booking however was visible on both the indices. We expect the volatility on the markets to pick up as we enter the F&O expiry on Thursday 26th Dec.
The markets managed to move beyond 21,200 on the Sensex & 6300 on the Nifty by 2.30 pm but were unable to sustain themselves at those levels. Baring IT, all other sectoral indices were trading in the green with Cap Goods & Metals taking the lead. For tomorrow we anticipate a flat move on the markets & one that could see weakness seeping in by the time we close the trade for tomorrow as we have a holiday of account of X’mas on the 25th Dec & F&O expiry the day after. At the close, the markets were up with Sensex at 21,100.03 up 21 points & Nifty at 6,284.50, up by 10.25 points.
Strength of the Indian rupee was impressive at 61.86 against the USD at 3.30 pm. In our view, the Indian rupee should gain more strength in the days to come and rise to 61.50/61.35 before the month end USD demand by the OMCs.
With upside capped on the index we would advice booking profits at higher levels for the short to medium term. The next trigger for the markets would be in form of quarterly earnings which will unfold from second week of Jan 2014.
Alex Mathews, Head Research, Geojit BNP Paribas Financial Services Ltd:
NSE Nifty traded in a narrow range but we saw fresh buying in the mid cap and small cap stocks. The global markets were trading higher on the positive US GDP data and the IMF bullish outlook on the US economy.
As the Nifty is futures are well above 6300 thee are chances that Nifty futures may move well above 6400 before expiry.
Nifty closed at 6284 up around 10 points. The market breadth remained positive as there were seen 1587 stocks advancing against 925 stocks declining.
The Volatility index, VIX closed at 16.26 up around 1.49%.
Barring the IT sector, which closed down around 1%, all other sectors closed in green. The major sectoral gainers for the day were Realty and Metal sectors which closed up around 3.10% and 1.38% respectively.
Jindal Steel and PNB were the gainers in the stock’s front, ended up around 5.41% and 4.46% respectively. The losers on the other end were INFY and Tata power closed down around 2.38% and 1.87% respectively.
The FIIs were net buyers in the cash segment, bought shares worth Rs 990.19 crore on 20, Friday December 2013. On the other hand the DIIs were net sellers on 20 December 2013, sold shares worth Rs 247.95 crore as per the provisional data from the stock exchanges.
The European markets were trading higher as on the news that IMF has raised its outlook on US and the US index futures were also up.
* BSE index closes up 0.1 pct; NSE index gains 0.16 pct
* Infosys falls after another key executive resigns
* Blue chips including ITC gain on foreign buying support
* Realty stocks edge higher on value buying
Indian shares edge up on foreign buying; Infosys falls
(Reuters) Indian shares edged higher on Monday, as blue chips gained on continued foreign inflows despite last week's decision by the U.S. Federal Reserve to start reducing its bond purchases, although a fall in Infosys Ltd capped broader gains.
Foreign institutional investors (FIIs) bought a net of $492.4 million in cash shares in the previous two trading sessions, according to exchange and regulatory data, even after the Fed announced on Wednesday it was trimming monthly bond purchases by $10 billion.
Foreign buying has helped calm nerves in a market that has come to depend on these flows, as overseas funds have net invested $19.9 billion so far this year.
The uncertainty around the QE taper is behind us and the market has digested that news, and compared to other emerging markets, India is definitely well poised to attract incremental FII flows," said S. Krishna Kumar, head equity at Sundaram Mutual Fund.
"We do expect sustained foreign-investor interest, including foreign direct investment, as growth also recovers."
The benchmark BSE index closed up 0.1 percent at 21,101.03 points, while the broader NSE index gained 0.16 percent to close at 6,284.50 for a second consecutive day of gains.
Blue chips gained on FII flows, with ITC Ltd closing 1.3 percent higher. Tata Steel Ltd ended up 1.2 percent, while Oil and Natural Gas Corp closed up 1.4 percent.
Real estate companies, seen as oversold in recent months, rose on value-buying, while public sector banks also made gains after the Reserve Bank of India surprised investors by holding interest rates last week.
Among real estate shares, DLF Ltd closed up 4.3 percent, Housing Development & Infrastructure Ltd ended higher 7.8 percent and Unitech Ltd rose 3.6 percent.
However, software exporter Infosys Ltd fell 2.3 percent after the resignation of V. Balakrishnan, who headed several business units. His exit was the latest departure by a top executive since co-founder Narayana Murthy returned as executive chairman. Shares in United Spirits Ltd closed down 3.6 percent following an Indian court's order annulling the sale of the Indian spirits maker to British group Diageo PLC, though Diageo said it would appeal the decision.
FACTORS TO WATCH
* Dollar slips in thin trade, Fed taper offers support
* Brent hits 2-wk high near, South Sudan supply in focus
* U.S. growth hopes help shrug off China jitters
* Foreign institutional investor flows