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Markets up, defy Greek referendum fears

Markets up, defy Greek referendum fears
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First Published: Wed, Nov 02 2011. 01 11 PM IST

Updated: Wed, Nov 02 2011. 01 11 PM IST
Mumbai: Shares rose 0.5% in choppy trade on Wednesday on value buying after last two sessions’ fall, but the gains were capped by worries over the euro zone debt crisis after Greece’s call for a referendum.
Energy major Reliance Industries led the gains, rising as much as 1.7% to Rs 875.50 on select bargain hunting in the index heavyweight that had shed 4.4% in the past two days.
Bajaj Auto was trading 1.8% higher at Rs 1,744 after the No. 2 motorcycle maker posted a 7% rise in October vehicle sales from a year ago period.
The main 30-share BSE index was trading up 0.47% at 17,562.56 at 11:42 am (0612 GMT), with 22 of its components rising. The index had fallen as much as 0.8% earlier in the day.
“Although the market fell initially, the undercurrents are strong,” S.P. Tulsian, an independent markets consultant said. “The sectors like banking and automobiles had taken a lot of beating and hence there was always room for improvement.”
Tulsian said the market was unlikely to see a sharp fall from the current levels.
The benchmark, which is down more than 14% in 2011, have been battered this year as surging inflation and interest rates dimmed the growth outlook for the economy and corporate earnings.
The global economic uncertainty has also pushed investors away from risky assets.
India’s central bank raised interest rates last month for the 13th and possibly final time in a tightening cycle that began in early 2010, on expectations that persistently high inflation will finally begin to ease starting in December.
Some analyst said the local markets would remain choppy in the near term on lingering worries about the impact of the euro zone debt crisis, and as the domestic corporate earnings season draws to a close.
The overseas markets witnessed a selloff after Greek Prime Minister George Papandreou fought off a barrage of criticism to win the backing of his cabinet on Wednesday to push ahead with a referendum the government said would take place as soon as possible on a European Union debt bailout deal.
“The markets are at a cross-road and they should mostly recover after the G-20 summit concludes, where we can expect a positive conclusion to the Europe crisis,” said R.K. Gupta, managing director of Taurus Mutual Fund.
Shares in Mahindra & Mahindra were up 1.3% at Rs 845.15. India’s largest utility vehicles and tractor maker posted a 20% rise in vehicle sales last month shrugging off a series of interest rate rises.
Wipro fell as much as 2% to Rs 370.90. The stock is down nearly 25% this year. Barclays said in a report it maintained underweight rating on the stock with a 12-month target of Rs 340 due to slower earnings growth.
State-run Hindustan Petroleum was trading 1.8% higher at Rs 341.65. Its finance director said on Tuesday the company is considering an increase in petrol prices as it struggles to cut down on retailing losses.
The 50-share NSE index was trading up 0.6% at 5,286.75 points. In the broader market, losers were slightly ahead of gainers in the ratio of 1.3:1 on total volume of about 243 million shares.
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First Published: Wed, Nov 02 2011. 01 11 PM IST
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