Indian Shares Close Near Three-Week Low On Profit-Taking

MUMBAI （Dow Jones）--Indian shares closed near a three-week low Tuesday as investors took profits while seeking to free up cash for subscribing to Coal India's $3.43 billion initial public offer.

The 30-stock Sensitive Index of the Bombay Stock Exchange fell 185.76 points, or 0.9%, to close at 19,983.13. It last ended below the 20,000 mark on Sept. 29, at 19956.34.

On the National Stock Exchange, the 50-stock S&P CNX Nifty fell 48.65 points, or 0.8%, to end at 6,027.30.

Trading volume on the BSE rose to INR52.71 billion from Monday's INR45.40 billion. Decliners outnumbered gainers 1,486 to 1,479, while 114 stocks were unchanged.

Coal India's IPO has received bids to cover the entire 631.64 million shares on offer on the second day of subscriptions Tuesday, according to National Stock Exchange data. The offer will close Thursday.

"Investors are booking profits to free up liquidity for the Coal India IPO," said Ambareesh Baliga, vice president at Karvy Stockbroking, adding that he expects similar trading until the offer closes.

He tipped the Sensex to trade between 19,600 and 20,200 during the next two-three days, with 19,000 as the support level. The market will see a sharp fall if the benchmark breaches the support, he added.

The Sensex has jumped 26% from a low of 15,960.15 on May 25, driven by strong investments from foreign funds, expectations of a bumper farm output due to normal rains during the June-September monsoon season and supportive global equity markets.

Foreign funds have purchased a record $23.51 billion of shares this year through Monday, according to data from the Securities and Exchange Board of India.

Eleven of the BSE's 13 sectoral indexes ended lower, with the IT index leading the losers with a 2.2% fall to 6,016.16.

The Healthcare index however bucked the trend, gaining 1.1% to 6,358.30, boosted by biopharmaceutial company Biocon, which touched a new lifetime high of INR464.60 before ending 13% up at INR455 due to its licensing deal with Pfizer for diabetes-treatment products. Generic drug maker Cipla closed up 1.5% at INR331.80.

Among other gainers, Motorcycle maker Hero Honda rose 1.5% to INR1,836, while ACC, the country's third-largest cement manufacturer by sales, added 0.7% to INR976.80.

Software exporter Infosys Technologies fell 3.1% to close at INR3012.30, while aluminum major Hindalco Industries dropped 2.2% to INR206.45 and Tata Steel ended down 2% at INR633.00.