Sensex falls 1.3 after 6-session rally

Energy major Reliance Industries and ICICI Bank were among the top losers after last week8217;s sharp rally.

Nothing can rise endlessly. Therefore,what you are seeing now is the consolidation. The profit-taking has begun,said D. D. Sharma,chief executive officer at Risk Capital Advisors.

The market will continue to rise going forward if the government were to aggressively pursue policy action needed for the economy,he said,calling Monday8217;s fall a technical drop.

At 11:18 a.m. 0548 GMT,the main 30-share BSE index was down 1.3 percent at 17,002.18 points,with 20 of its components falling. The index touched its highest closing level in 11 weeks on Friday.

State-run BHEL8217;s shares were trading 7.46 percent lower at 253.15 rupees after it reported a lower-than-expected 2.1 percent rise in quarterly profit on Friday.

Macquarie cut its target price for BHEL to 233 rupees from 314 earlier,saying a nightmare scenario was playing out for the company. We are now faced with worst case scenario on order inflows with 35 percent decline in FY12,Macquarie said.

BHEL8217;s performance pulled down shares of rival Larsen amp; Toubro Ltd,which fell 1.6 percent.

Any imposition of import duty on power equipment in the annual federal budget will be a boost for BHEL and Larsen amp; Toubro,Sharma of Risk Capital Advisors said.

The ministry of heavy industries has been pushing for charging higher duty on imports of all power equipment,which if imposed,will make domestic makers more competitive against largely Chinese imports.

Energy major Reliance Industries,which contributes about a tenth to the benchmark index,fell 1.6 percent to 806.95 rupees,ahead of an up to 2.1 billion buyback that opens on Feb. 1.

Lenders ICICI Bank and HDFC Bank were each trading about 1.9 percent lower,while top lender State Bank of India was down 0.3 percent.

The 50-share NSE index was down 1.07 percent at 5,149.25. In the broader market,there were about 1.3 losers for every gainer,with 256 million shares changing hands.

Asian shares inched down as markets cautiously tuned in to a likely debt swap deal for Greece that is crucial to avoiding a messy default and eyed yet another European summit meeting.

The MSCI8217;s measure of Asian markets other than Japan was down 0.65 percent,while Japan8217;s Nikkei was down 0.68 percent.

STOCKS ON THE MOVE

Turnkey power projects contractor Jyoti Structures was trading 4.7 percent lower at 47.70 rupees after the company posted slower-than-expected sales growth in October-December.

Bhushan Steel rose as much as 2 percent to 356.95 rupees after the company said its board has approved raising up to 7 billion rupees 142 million through a rights issue of shares.

MAIN TOP THREE BY VOLUME

Suzlon on 15.2 million shares

Lanco Infratech on 14.9 million shares

GVK Power and Infrastructure on 10.6 million shares

FACTORS TO WATCH

Indian rupee drops on import payments,lower shares

India8217;s 10-year bond yield falls on debt buyback hope

Euro off recent peaks on profit-taking; Greece talks eyed

Brent drops towards 111/bbl; EU,Iran eyed

Shares,euro guarded over likely Greek debt

Wall St cuts losses on late buying,more gains seen

STOCKS/PREOPEN: Sensex seen opening lower; NTPC may fall

Sensex is expected to open lower on Monday as profit-taking emerges after an 11.5 percent rally in the main index this month. Mostly subdued Asian markets will also weigh.

NTPC Ltd,the country8217;s top power producer,may drop after it reported on Friday a bigger-than-expected 10 percent fall in quarterly net profit,hurt by a surge in fuel costs.

Leading real estate company DLF Ltd will be watched ahead of its results,with the sector facing sluggish sales as property prices and interest rates remain high.

We have had a huge run up. There is bound to be some profit taking,said Arun Kejriwal,strategist at research firm KRIS.

The 30-share BSE index climbed to an 11-week closing high on Friday after rising for six consecutive sessions.

At 0242 GMT,the MSCI8217;s broadest index of Asia Pacific shares outside Japan was down 0.4 percent,while the Nifty India stock futures in Singapore was down 0.81 percent.

STOCKS TO WATCH

Bharat Heavy Electricals Ltd may fall after the state-run equipment maker reported lower-than-expected 2.1 percent rise in quarterly profit.

Jyothy Laboratories Ltd after the company said it raised a 4.30 billion rupee long-term loan to redeem zero coupon non-convertible debentures.

FACTORS TO WATCH

Perky euro clings to Greece hopes,summit eyed

Brent up on Iran; refinery work lifts U.S. gasoline

Shares,euro guarded over likely Greek debt deal

Wall St cuts losses on late buying,more gains seen