BENGALURU, June 8 (Reuters) - Indian shares closed higher on Monday but gave up big gains made earlier in the day as investors locked in profits following a two-week long rally that picked up pace as lockdowns eased.
Since May 25, the NSE Nifty 50 index and S&P BSE Sensex have surged more than 11% each on hopes of Asia’s third largest economy relaxing its months-long lockdown.
Gains in technology shares helped the NSE Nifty 50 index end 0.25% higher at 10,167.45, while the S&P BSE Sensex gained 0.24% at 34,370.58. The Nifty IT index rose 1.83%.
“The rally has been fueled by torrent of liquidity. Its sustenance can only be guaranteed if there is strong earnings support, which looks unlikely to happen anytime soon,” said Ajay Bodke, CEO and chief portfolio manager (Portfolio Management Services) at Prabhudas Lilladher in Mumbai.
“Smart money basically looks at the upside to downside ratio. Today, we are at the upper range of that upmove and the downside risks are increasing with every upmove,” he added.
The Nifty banking index ended up 0.73%, after rising as much as 3.7% earlier in the day. HDFC Bank Ltd , down 1.6%, was the top drag in the Nifty 50 index.
Shares of private-sector lender IndusInd Bank ended up 7.26%, after the bank said promoters IndusInd International Holdings Ltd and IndusInd Ltd planned to raise their stake through share purchases from the open market.
Also, weighing on overall sentiment, world stocks paused on Monday as investors turned cautious after a 42% surge since March, as economies continued to struggle with the effects of the coronavirus pandemic. (Reporting by Nallur Sethuraman in Bengaluru; Editing by Amy Caren Daniel)