BackMarkets rise 4th day, financials climb
Markets rise 4th day, financials climb
PremiumBangalore: Shares climbed 0.7% on Thursday, extending gains to a fourth day, on hopes robust economic growth would boost corporate earnings. Firm global markets also helped the upbeat sentiment.
Financials rallied after the Indian cabinet decided to pump an additional ₹ 6000 crore ($1.3 billion) into state-run banks to improve their capital adequacy and to lift the government’s stake in them.
“The bounce back over the past few sessions has happened because of a lot of stocks being over sold. We are seeing a lot of follow-on buying happening," said Neeraj Dewan, director at Quantum Securities.
The 30-share BSE index closed up 142.7 points, at 19,992.7, with 17 components gaining ground.
The benchmark had fallen 2.6% in November, its biggest monthly loss since May, battered by a series of scandals that most hurt stocks in financial, telecom and real estate sectors.
The scandals - which include issue of telecom licenses at low prices and a bribes-for-loans scam that saw eight financial industry executives arrested last week - will continue to be an overhang for the markets in the near term, analysts said.
The market is, however, up 14.5% so far this year bolstered by overseas portfolio investments worth about $29 billion.
The banking sector index firmed 1.2%, also supported by hopes a fast-growing economy and pickup in industrial activity would boost demand for loans. ICICI Bank and HDFC Bank gained 2 and 1.2% respectively.
“India is a compelling story for foreign investors as it is looking at a 9% economic growth. Consumption is growing, rural economy is also buoyant," said Deven Choksey, managing director of KR Choksey.
On Wednesday, a survey showed the manufacturing sector in Asia’s third-largest economy expanded at its fastest pace in six months in November on the back of robust new business and a sharp rise in export orders.
Official data earlier showed the Indian economy grew a better-than- expected 8.9% in the September quarter, boosted by robust farm output and manufacturing..
Explorer Oil and Natural Gas Corp (ONGC) trimmed gains to 1.9% at ₹ 1,313.05 by close, after rallying as much as 5.1% early after the cabinet approved the state-run firm’s proposal for a stock split and a one-for-one bonus issue..
Wipro, the No. 3 outsourcer, ended up 2.6% after the company said its billionaire chairman Azim Premji would transfer 8.7% holding to an irrevocable trust. Dealers said this would likely help improve liquidity in the stock.
Metal counters Tata Steel, Hindalco and Sterlite Industries rose 1.4 to 3.1%, tracking bullish metal prices in the world markets.
Hero Honda fell 7.3% after the Business Standard reported the motorcycle maker has agreed to increase its royalty payments to Honda Motor Co to 8% of annual sales in return for a technology makeover and a stake sale by the Japanese firm in the venture..
In the broader market, gainers outpaced losers by a ratio of 1.8-to-1 on volume of about 415 million shares.
The broader 50-share NSE index gained 0.9% to 6,011.7.
Elsewhere, the FTSEurofirst 300 was up 0.5% at 4:00pm, while the MSCI’s measure of Asian markets other than Japan added 1.6%.
STOCKS
J.B. Chemicals & Pharmaceuticals rose 7.9% to ₹ 135.55 after the company said it won US regulatory approval for diclofenace sodium tablets.
Mastek Ltd closed up 13.6% at ₹ 208.95 on news the software services firm had acquired the assets of SEG Software for an undisclosed amount.
Dewan Housing Finance firmed 7.2% after it said the company, along with its founders Wadhawan Housing and Caledonia Investments, had acquired Deutsche Postbank Home Finance for ₹ 1079 crore.
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