Midsession: Sensex extends gains to 1% on short-covering

Midsession: Sensex extends gains to 1% on short-covering
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First Published: Fri, Jul 03 2009. 02 44 PM IST
Updated: Fri, Jul 03 2009. 02 44 PM IST
Mumbai: Indian shares extended gains to more than 1% on Friday afternoon on short covering ahead the federal budget next week, traders said.
At 2:17pm, the 30-share BSE Index was up 0.8% at 14,769.53 points, with 17 stocks gaining, after rising as high as 14,807.54. It had slipped more than 1% earlier in the session.
The 50-share NSE index was up 0.7% at 4,380.50 points.
Expectations ran high on the bourses early as the key indices went up on investors buying power and capital goods stocks.
The Bombay Stock Exchange benchmark Sensex, which had lost 158 points in opening trade, rebounded to quote higher by 55.13 points at 14,713.62 at 1100 hrs.
Similarly, the 50-share National Stock Exchange index Nifty rose by 15.55 points at 4,364.40 at the same time. The Nifty had lost nearly 50 points in the opening session.
Marketmen said investors and funds are expecting some favourable budetary proposals such as cuts in freight rates and fares.
Indian shares fluctuated in a narrow band early with investors not taking significant positions ahead of the federal budget next week and weak Asian cues dampening sentiment.
Traders booked profits in key gainers from the previous session, such as Oil and Natural Gas Corp and Tata Steel, while technology stocks were under pressure on worries over the economic turnaround in key markets.
The market could take some trading direction in the second half of the session, after the railway budget is presented in parliament, but the overall mood is likely to be cautious, traders said.
“We won’t see much movement because people don’t want to take positions, either way. We will see volatility, but by end-of-day, it is likely to be flat,” said Ambareesh Baliga, vice president at Karvy Stock Broking.
By 10:55am, the 30-share BSE index was up 0.15% at 14,680.51 points, with 13 components declining. It had slipped as much as 1.1% at one point. The 50-share NSE Index was up 0.2% at 4,357.10 points.
Technology stocks dropped on worries about the condition of their key US market, after government data showed the US economy shed more jobs than expected in June, dampening the outlook for an economic turnaround.
Top outsourcer Tata Consultancy Services, slipped 0.6% to Rs388, Infosys, which reports quarterly results next week, fell 1.8% to Rs1,764.50, while Wipro lost 0.5% at Rs379.
ONGC, which rose 7% on Thursday after the government unexpectedly raised auto fuel prices, helping ease its subsidy burden, was down 1.7% at Rs1,107.
Tata Steel, which jumped 6.4% on Thursday after news of its plans to sell global depositary receipts, fell 0.5 percent to Rs417.20.
Overnight, US stocks fell more than 2% on worse-than-expected jobs data, which also dragged down Asian stocks, although the drop was limited.
Among key gainers, Housing Development Finance Corp rose 2.1% to Rs2,452 on hopes of higher tax breaks in the federal budget, that could boost mortgage demand. The largest listed company, Reliance Industries, was up 0.4% to Rs2,016 after falling more than 2% on Thursday.
“The market is only likely to get direction after the Budget on Monday,” said SP Tulsian, an independent investment analyst.
In the broader market, 1,001 decliners outpaced 956 advancers on low volume of 78 million shares.
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First Published: Fri, Jul 03 2009. 02 44 PM IST
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