Mumbai: Markets snapped five days of falls to gain as Larsen & Toubro surged after positive results, while an improvement in global risk sentiment and the central bank’s intervention in currency markets helped provide some stability.
The main BSE index has fallen 4.12% over the previous five sessions as worries about India’s economic outlook have intensified following poor industrial output data and concerns about inflation.
The domestic concerns have come during a sharp risk-off trade globally because of the political uncertainty in Greece, though European equities inched up somewhat on Tuesday following better-than-expected economic data.
The Reserve Bank of India also stepped in aggressively in currency markets, after the rupee fell to as low as 54.15 to the dollar during the day, threatening to touch a record low of 54.30 hit in December.
However, these are expected to be temporary reprieves, and analysts say India’s benchmark index is liable for more falls after already falling 6.4% t h is month.
“Today’s rise was more due to short-covering because of Larsen’s decent results and rupee gaining strength due to RBI’s effort,” said Prakash Diwan, Head of the Institutional Clients Group at Asit C.Mehta Investment.
Indian markets rebounded on Tuesday after five straight sessions of decline. Mint’s Lisa Pallavi Barbora takes you through the day’s biggest gainers and losers
The country’s main 30-share BSE index rose 0.69% to 16,328.25, while the broader 50-share NSE index gained 0.71% to 4,942.80 points.
Also supporting domestic shares was data showing foreign investors had extended their net purchases to a third consecutive session as of Monday, for a provisional total of 8.8 billion rupees ($163.43 million) during the period.
Shares in engineering conglomerate Larsen and Toubro rose 5.42% a day after reporting stronger-than-expected earnings, while traders also welcomed its guidance of 15-20% growth in revenue and order wins.
Recently battered blue chips fell as some investors saw them as good buy opportunities. Infosys gained 3.26%, with the stock down 18.40 p e rcent in the quarter started April compared to a 7.32% fall in the NSE index.
ICICI Bank rose 2%, having dropped 9.3% so far in May as of Monday’s close.
India’s Bharat Petroleum Corporation rose 2.1% after US partner Anadarko Petroleum Corp said it had discovered a major new gas field in Mozambique.
However, among decliners, Bharti Airtel fell 1.2% after a government minister said Indian authorities were investigation the mobile phone carrier under provisions of the country’s money laundering and foreign exchange rules.