RTTNews - The Indian market wiped out its early gains and ended sharply lower on Monday, as profit taking continued amid concerns about stretched valuations and caution ahead of the forthcoming budget. Weak opening of the European markets, the lower U.S. index futures and recent selling by foreign funds also weighed on market movement ahead of the June series derivatives contracts expiry on Thursday.

Investors, meanwhile ignored news about a revival in India's south-west monsoon after a two-week lull and reports that the forthcoming budget will be popular to get back to between 8-9% economic growth. The word populist has negative overtones, but I am sure (the) Finance Minister will present a popular Budget. However, we should maintain the mystery of the Budget and you have to wait and see what comes out,'' Planning Commission Deputy Chairman Mr Montek Singh Ahluwalia told PTI in an interview.

Reports that United Bank of India is planning to raise Rs.3-4 billion through an initial public offer in December also failed to lift investor sentiment. Investors fear that there could be further correction surrounding the budget and preferred a wait-and-watch approach ahead of the release of a slew of economic reports from the U.S. this week, the prominent among them being data on new and existing home sales and the U.S. Federal Reserve's policy approach and its stance on interest rates.

After trading in positive terrain till the mid-session, the BSE Sensex tumbled to a low of 14,268 in late trading before finishing at 14,326, down 196 points or 1.35% from its previous close. Likewise, the S&P CNX Nifty fell 78 points or 1.82% to 4,235, the broad-based BSE 500 index declined 1.24%, the mid-cap index moved down 0.57% and the small-cap index shed 0.33%.

On the BSE, the market breadth was slightly negative. Decliners outnumbered advancers by 1493 to 1114 and 68 stocks closed unchanged. Sector-wise, while oil/gas, power, metal and realty stocks led the decliners with over 2% gains on an average, select FMCG, capital goods and banking stocks showed notable gains.

Among the major losers, Tata Power, Grasim Industries, Reliance Infrastructure, Reliance Industries and Hindalco tumbled over 4% each. Mahindra & Mahindra, NTPC, Ranbaxy Laboratories, Tata Motors, TCS, Reliance Communication and DLF were the other prominent decliners.

On the other hand, ICICI Bank, ITC, Maruti Suzuki, Larsen & Toubro, HDFC, Jaiprakash Associates and BHEL ended in positive territory.

India Foils fell 3.79% after jumping nearly 60% on Friday on the back of its re-listing on the BSE after the reduction of its share capital. Hotel Leela Ventures tumbled 3.61% on reports it has sold its maiden offshore casino in Goa to the MDLR group

LIC Housing Finance declined 2.33% on reports that it would launch a real estate-focused venture capital fund with an initial corpus of Rs.500 crore by September-end. Apollo Hospitals ended with a modest 0.20% loss, ignoring reports that the International Finance Corporation has granted it a $50 million loan to expand its hospital network into smaller cities.

National Aluminum Company(Nalco) tumbled nearly 5% after it has successfully commissioned its ninth unit of 120- MW capacity captive power plant at Angul. Sun Pharmaceutical Industries fell 2.24% even as it received approval from the U.S. Food and Drug Administration for the launch of a generic version of Pfizer's blood pressure drug Accupril.

Rolta India ended up 0.78% after the company announced its intention to buyback zero-coupon convertible bonds worth $150 million. GSS America Infotech closed down 1.36% after the company decided to acquire a US-based IT infrastructure company with revenues of $24 million.

ABB India ended down 0.57% despite bagging orders worth Rs 55 crore to provide electrical infrastructure for modernization of the Kolkata airport. Nagarjuna Construction ended up 0.50% after it bagged a clutch of orders totaling Rs.358 crore.

Financial services firm Future Capital Holdings rallied 4.74% after its board approved raising additional long-term funds through the issuance of further securities or via debt for general corporate purposes, expanding existing businesses and for strategic investments or acquisitions.

Oil explorer Reliance Industries fell 4.27%, Cairn India declined 2.67% and ONGC moved down 1.62% on concerns about their profitability amid reports the government could force them to pay royalties on the basis of sale prices in the future instead of the present system of wellhead value.

State-run oil-marketing company HPCL rose 1.14%, but BPCL and IOC ended in the red Dolphin Offshore Enterprises India advanced 3.40% on bagging an order worth Rs 106.01 crore. McNally Bharat Engineering Company was locked at the 5% upper circuit limit after the company bagged an order worth Rs 30.60 crore from Paradip Port Trust, Orissa

Karnataka Bank edged up 0.60% on the back of a block deal on the NSE. Four Soft jumped nearly 5% after its FY09 net profit climbed more than 4 times year-over-year. Jindal Saw soared 4.72% on revealing that it has received orders aggregating to more than Rs 1000 crore for supply of large diameter pipes and ductile iron pipes for domestic and export markets.

Mount Everest Mineral Water jumped 4.86% after Tata Tea raised its stake in the company by 4.11% to 40.11% through two separate open market transactions on Friday. Rail-related stocks such as Kalindee Rail Nirman Engineers, BEML and Titagarh Wagons rose over 4% each on expectations the forthcoming railway budget for 2009-10 will contain some populist measures.

Elsewhere, the other major Asian markets ended up on optimism about an economic recovery in China, European stocks were trading in the red in early trading and U.S. stocks are poised to start the week on a sober note amid increasing concerns about the economic recovery after the World Bank further trimmed its growth forecast for the year 2009.

For comments and feedback: contact editorial@rttnews.com