Mumbai: Markets extended gains to 2% on Monday, helped by strong Asian markets, with financials and engineering conglomerate Larsen & Toubro leading the rise.
At 11:40am, the 30-share BSE index was up 2.03% at 18,088 points, with 28 components advancing. The 50-share NSE index was up 2.1% at 5,421.80.
Shares were trading 1.3% higher early morning with, but a fall in shares of Reliance Industries and Reliance Communications checked big gains.
Reliance Industries fell as much as 1.7% after The Economic Times newspaper, citing an unnamed source close to proceedings, reported the markets regulator may impose penalty of upto Rs 1500 crore ($328 million) if it establishes the energy major was involved in insider trading.
Reliance Communications skid as much as 4.5% after parent, Reliance ADA Group, said late Friday authorities had “examined” some of its officials as part of a probe into a telecoms licence row and that it was cooperating with them.
By 10:30am, the 30-share BSE Index was trading up 1.29% at 17,957.88 points, with 26 of its components in the green. The 50-share NSE index was up 1.3% at 5,380.90 points.
But dealers were not convinced about the gains holding forth.
“It is just a short pullback tracking global cues. But, I don’t think it will hold for now,” said Sunder Subramaniam, senior manager of institutional sales at brokerage Sharekhan.
“The main issues, corruption and inflation, continue to hurt.”
Foreign funds have withdrawn $1.7 billion from Indian equities year to date, with the benchmark index losing 12.5% in the period.
Hindalco Industries slipped as much as 3.6% as a 7.7% rise in quarterly net profit reported by India’s top aluminium producer on Saturday lagged a consensus forecast due to lower output and rising input costs.
Firm base metal prices, however, helped the stock to rebound later and trade 1.4% higher.
Financials marched ahead of monthly inflation data due around noon.
Wholesale price inflation in Asia’s third-largest economy is expected to marginally ease to 8.05% in January, from 8.43% in December, as commodity and fuel prices remain elevated, a median forecast in a Reuters poll showed.
Leading lenders State Bank of India ICICI Bank and HDFC Bank gained between nearly 1% and 2.3%.
Reliance Industries and Reliance Communications erased some of the losses and were trading down 0.2% and 0.8% respectively.
Reliance Communications’ December-quarter earnings is due later in the day and consensus estimate in a Reuters poll show analysts expect the second-largest mobile operator’s net profit to fall 64% from a year ago.
Market breadth was positive with nearly six shares advancing for every share that declined, in a volume of 71 million shares.
Reliance Infrastructure and Reliance Power gained 0.3% and 0.8% respectively ahead of their quarterly earnings announcements later in the day.
Software services exporter Mahindra Satyam was up 10.2% at 63.85 rupees after it said its fiscal third quarter net profit more than doubled from a quarter ago, helped by new outsourcing deals from western clients.