Indian shares drop

Indian shares shed 0.6 percent on Wednesday, led by a decline in software companies, while outlook remained shaky on interest rate hike concerns. IT stocks led the decline, with the sector index dropping 1.2 percent after rising 4.4 percent over the previous two sessions. Leading outsourcers Tata Consultancy Services, Infosys and Wipro declined between 0.6 percent and nearly 2 percent.
Cricket function at BSE Bajaj Auto, second-largest two-wheeler maker, closed up nearly 2 percent, as it posted a 40 percent rise in its third-quarter net profit. The 30-share BSE index declined 113.73 points to 18,978.32, with 21 of its components declining. The 50-share NSE index or Nifty shed 0.6 percent at 5,691.05. "I think market will stay volatile for now," said Nitin Rakesh, CEO of Motilal Oswal's asset management business.
"We have some near-term issues to address like inflation pressures, high commodity prices and so on." Investors were also cautious ahead of a cabinet reshuffle in the Indian government. The rejig saw no major change in the key ministries of finance, home, defence and foreign affairs, a government statement showed on Wednesday after the stock market closed.
Foreign funds have been sellers of Indian shares in nine of the 12 initial sessions of 2010, pulling out a net of around $710 million. The main index is down 7.5 percent year-to-date. Brazil's Bovespa and Russia's RTS index have gained 2.3 percent and 7.6 percent year-to-date, while China's Shanghai Composite Index has shed 1.8 percent. On Wednesday, gainers almost matched the number of losers in the broader market in low volume of 329 million shares.
Tata Steel gained 1.2 percent after the world's seventh-largest steel maker raised $112 million from anchor investors at the upper end of an indicated price range ahead of a public share offering. Financials mostly declined with the central bank expected to unveil a hawkish monetary policy next Tuesday, in an effort to tame spiralling inflation. Top lender State Bank of India and private-sector lender HDFC Bank dropped 1.9 percent and 1.5 percent, respectively. Mortgage lender Housing Development Finance Corp eased 0.7 percent. Top private lender ICICI Bank bucked the trend and rose 1.2 percent.