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BSE Sensex falls around 100 points; IT shares slump

A broker monitors share prices while trading at a brokerage firm in Mumbai August 22, 2013. REUTERS/Danish Siddiqui/Files

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex fell on Wednesday, easing for a second consecutive session, as blue chips such as Tata Motors and software services exporters declined on profit-taking after indexes this week hit their highest in nearly three years.

The falls also tracked lower Asian shares due to concerns over tighter Chinese monetary policy. A policy adviser to the People's Bank of China told Reuters the authority may tighten cash conditions in the financial system to address the inflation risks, while the central bank refrained from supplying cash to money markets for the second day running.

Traders are also growing cautious ahead of earnings from non-information technology companies, while the Reserve Bank of India is due to hold its policy review on October 29

"It's natural for profit-taking to happen after Indian markets rose to near record highs due to a global rally, while any sort of strong domestic macro data was mostly absent," said Phani Sekhar, fund manager of portfolio management services at Angel Broking.

The Sensex fell 0.47 percent, or 97.09 points, to end at 20,767.88, retreating for a second day after marking its highest level since November 2010 on Monday.

The broader Nifty fell 0.39 percent, or 24.45 points, to end at 6,178.35, falling for a second consecutive session, also closing below psychologically important level of 6,200.

On a more positive note, foreign investors remained net buyers for a thirteenth consecutive session after buying 7.94 billion rupees worth of shares on Tuesday, bringing their total to about 110 billion rupees during that period, regulatory and exchange data showed.

Among individual shares, Wipro Ltd (NSI:WIPRO.NS - News) fell 4.3 percent after the company's July-September revenue in dollar terms grew 2.7 percent sequentially, lagging other major IT services exporters, dealers said.

Other IT stocks also slumped on profit-taking. Tata Consultancy Services Ltd (NSI:TCS.NS - News) fell 1.4 percent, while Infosys Ltd (NSI:INFY.NS - News) lost 0.5 percent and HCL Technologies Ltd (NSI:HCLTECH.NS - News) ended 0.2 percent lower.

The NSE index for IT shares (.CNXIT) had risen 45.4 percent in 2013 compared with the NSE index's returns of 4.6 percent as of Tuesday's close.

Among other blue chips, Tata Motors Ltd (NSI:TATAMOTORS) fell 1.4 percent on profit-taking after hitting a record high of 393.30 rupees last week.

Cairn India Ltd (NSI:CAIRN.NS - News) shares fell 3.5 percent after Credit Suisse downgraded the stock to "neutral" from "outperform", saying its July-September profit-after-tax and revenue missed estimates.

Exide Industries Ltd (NSI:EXIDEIND.NS - News) shares fell 2.2 percent after the company said its September-quarter net profit fell 1.3 percent to 1.19 billion rupees.

However, shares in state-owned companies surged on expectations that the government would demand sharply higher dividend payments this fiscal year, according to traders.

Hindustan Copper Ltd (NSI:HINDCOPPER) surged 10.9 percent, while Dredging Corp of India Ltd (NSI:DREDGECORP) jumped 5 percent to its maximum daily limit.

Meanwhile, GAIL (India) Ltd (NSI:GAIL.NS - News) gained 3.9 percent after the Economic Times reported the oil ministry has decided to exempt the company from having to compensate state fuel retailers for selling diesel, kerosene and cooking gas below market rates, citing unnamed ministry officials.

Hero MotoCorp Ltd (NSI:HEROMOTOCO) rose 0.9 percent after India's largest two-wheeled vehicle maker, beat analyst estimates with a 9 percent rise in profit, the first gain in five quarters.

(Editing by Anand Basu)