Noon: Choppy markets edge up; Reliance, HDFC gain

Noon: Choppy markets edge up; Reliance, HDFC gain
PTI
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First Published: Fri, May 22 2009. 01 35 PM IST

Updated: Fri, May 22 2009. 01 35 PM IST
Mumbai: Indian shares rose on Friday morning as some funds saw an opportunity after two days of losses to buy into a post-election surge that has taken gains in an 11-week rally to more than 70%.
Analysts believe the market is overbought, but say foreign investors have funds that they are eager to invest.
“It is a classic battle between high valuations and a lot of liquidity. Let’s see who wins,” Ajay Parmar, head of research at Emkay Share and Stock Brokers, said.
Energy giant Reliance Industries, top mortgage lender Housing Development Finance Corp and infrastructure firm Larsen & Toubro led the main index higher after a lower start.
By 11:15am, the 30-share BSE index was up 0.1% at 13,751.76 points, with 14 stocks advancing, after opening down 0.5%. It rose as much as 0.75%. The 50-share NSE index was down 0.4% at 4,195.75.
The benchmark fell 2.3% on Thursday, easing for a second day after jumping 17.5% in two days after the ruling coalition won an unexpectedly strong election mandate.
The index was up 12.8% this week at Thursday’s close, and is on track to post its 11th straight weekly rise for the first time in almost four years.
“Shares have gone up without any upward correction to earnings estimates. International markets are also down, so we should fall,” Parmar said.
“But we are in our own orbit right now.”
Asian shares were trading lower after a drop on Wall Street overnight on fears the United States, with its increasing budget deficit and weakened economy, could lose its AAA rating.
Japan’s Nikkei was down 0.6%, while MSCI’s measure of other Asian markets fell 0.7%.
Reliance Industries, which has the biggest weight in the main index, rose 1.1% to Rs2,140.50, while HDFC gained 2.9% to Rs2,160. Larsen & Toubro climbed 0.5% to Rs1,249.
Outsourcers such as Tata Consultancy and Infosys Technologies, which get most of their revenue from overseas, fell about 1-1.5% as the rupee climbed past 47 to a dollar to its highest since December.
In the broader section, gainers led losers 2 to 1 on relatively heavy volume on 211.5 million shares.
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First Published: Fri, May 22 2009. 01 35 PM IST
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