India's Sensitive Index Declines; Reliance, Cement Makers Drop

July 5, India -- India's stocks fell, dragging the Sensitive Index down from a record as some investors judged the benchmark's rally excessive. Reliance Industries Ltd. and ACC Ltd. paced declines.

``We are seeing a pause to the rally,'' said Prateek Agrawal, who oversees $203 million in stocks as equity head at ABN Amro Asset Management India Ltd. in Mumbai. `` We have seen the markets rally on the back of strong liquidity and in sync with global equity markets.''

ACC Ltd. led cement makers lower after some investors judged recent gains excessive.

The Bombay Stock Exchange's Sensex declined 110.94, or 0.8 percent, to 14,769.30 as of 11:29 a.m. local time. Twenty-two stocks declined while eight advanced in the index. The Sensex yesterday rose to its third-straight record.

The S&P/CNX Nifty Index on the National Stock Exchange slid 29.35, or 0.7 percent, to 4329.95.

The Sensex's relative strength index, a moving average based on advances and declines in the previous 14 days, rose above 70 since yesterday. A reading above 70 indicates to some analysts the benchmark is poised to fall.

Reliance, the nation's most valuable company and the stock with the biggest capitalization in the index, fell 31.1 rupees, or 1.8 percent, to 1684.6.

ACC, the country's largest cement maker, fell 29.55 rupees, or 2.9 percent, to 993, after climbing 22 percent over the past five trading days. The stock's RSI exceeded 70 yesterday.

Grasim, Ambuja

``We are seeing a pause the rise in cement shares after the smart rally over the last few days, Agrawal at ABN Amro said.

Grasim Industries Ltd., the third-biggest cement maker, declined 24.65 rupees, or 0.9 percent, to 2715. Its RSI was above 70 for the past two days. Ambuja Cements Ltd., India's fourth-ranked, that is partly owned by Holcim Ltd., slid 2.55 rupees, or 2 percent, to 127.4 after rising 6 percent over the past two days. Its RSI surpassed 70 yesterday.

Overseas investors bought a net 4.1 billion rupees ($100.6 million) worth of Indian shares on July 3, according to the latest figures from the Securities & Exchange Board of India's Web site.

The following shares rose or fell. Stock symbols are in brackets after company names.

DLF Ltd. (DLFU IN) climbed 20.3 rupees, or 3.9 percent, from its initial offer price to 545.3. The real-estate developer controlled by billionaire Kushal Pal Singh, listed on the Indian stock exchanges today. The company raised 91.9 billion rupees in the nation's biggest initial share sale, selling 175 million shares at 525 rupees apiece.

JM Financial Ltd. (JM IN) slid 3.8 rupees, or 0.4 percent, to 1055. The company, Morgan Stanley's former Indian partner, said it agreed to buy a 60 percent stake in ASK Securities India Pvt. for 581.4 million rupees. The venture will focus on equity research, institutional sales and trading.