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Investors cautious as earnings season nears

BSE Sensex down 0.05% at 13,183.24

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Indian shares edged down 0.05 per cent yesterday after five straight days of gains, as investor caution grew ahead of the release of quarterly earnings by bellwether Infosys Technologi­es later this week.

The 30-share benchmark BSE Sensitive Index (Sensex) closed 6.3 points down at 13,183.24, with 16 components losing ground, after it had risen almost six per cent in the previous five sessions.

“Everybody would like to see what Infosys reports. So there is some amount of caution,” said Jigar Shah, head of equities at Mumbai brokerage K.R. Choksey. “Additional liquidity will come to the market only after the results.”

Movers

Software services firms led the losses. Infosys, which reports its results on Friday, fell for a second day, losing 0.3 per cent to Rs1,992.35 on concerns about the outlook for the fiscal year that began on April 1.

Analysts expect Infosys, India’s second-largest software exporter, to forecast earnings growth of about 25 per cent for 2007-08, but some are worried the rupee’s appreciati­on could hurt the profitabil­ity of export-dependent technology firms.

Shares in Tata Steel Ltd. rose to their highest since January 29 — the trading session before they won the bidding for Corus Group — and closed 3.3 per cent up at Rs511.85, taking their gains this month to nearly 14 per cent.

On Tuesday, the firm said its board would meet next week to consider proposals for raising equity funds as part of the financing of the $12 billion takeover, and analysts said it could be through a rights issue or a global depositary receipts issue.

Aluminium and copper producer Hindalco Industries jumped 4.4 per cent to Rs142.25 after copper futures on the London Metal Exchange hit a sevenmonth high on a robust demand outlook and aluminium also firmed.

The mid-cap index gained 1.02 per cent and the small-cap index rose 0.82 per cent, with both notching their strongest closes since March 1.

“Mid-caps will continue to give good returns, while we see a rangebound movement in the [benchmark] index for a few more weeks,” Shah said.

In a broader market, 1,540 gainers beat 1,025 losers on volume of 221.5 million shares.

The 50-issue NSE index closed 0.38 per cent up at 3,862.65, its highest close in three weeks.

Colombo’s All-Share index closed 0.47 per cent up at 2,820.37.

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