Mumbai: The BSE Sensex reversed early losses to rise over 1% on Tuesday, tracking firm Europe and better-than-expected domestic growth.
The country’s economy grew 8.9% in the September quarter, above a Reuters’ forecast of 8.3% growth, boosted by farm output and manufacturing.
At 1:39pm, the 30-share BSE index was up 1% at 19,599.32 points, with 22 components advancing. It had fallen nearly 1% earlier. The 50-share NSE index was up 0.9% at 5,884.2 points.
Sensex had fallen 0.6% in the morning in tandem with lower Asian peers, while stocks in scandal-hit sectors such as financial, realty and telecoms continued to swing widely.
Unitech and Videocon fell more than 6% each in early trade after the telecoms ministry said on Monday it would send notices to firms that were given 85 telecoms licences in 2008, asking why their licences should not be cancelled after a government auditor found the companies were not eligible for them.
The mobile services arm of realtor Unitech and Videocon are among the companies that the government auditor had said were not eligible for getting licences as they suppressed facts.
The 30-share BSE index was trading down 0.6% at 19,282.35 at 10:48am, with 24 of its components in the red. The 50-share NSE index was down 0.7% at 5,786.95.
”Global markets are what is keeping the market down today with only specific sector stocks being hit by the scandals. I expect stock specific buying to come now,” said Neeraj Dewan, director at Quantum Securities.
India’s economic growth data is due around 11:00am. The economy probably grew an annual 8.3% in the September quarter, the median forecast of 29 economists showed.
GDP in April-June had expanded 8.8% - its strongest pace since the December quarter of 2007.
The real estate sector index, which had fallen 2.3% early, recovered smartly to trade up 2%. Top listed realtor DLF was up 2.6%, while Jaiprakash Associates rose 1%.
A source at the Central Bureau of Investigation told Reuters on Monday the agency’s probe into a bribes-for-loans case would widen to other public sector banks.
The banking sector index was down 0.2%. Top private-sector lender ICICI Bank, HDFC Bank and Housing Development Finance Corp all lost more than 1%. State Bank of India, the country’s leading lender, was up 1.3%.
In the broader market, gainers led losers in a ratio of 1.3:1 on volume of 120 million shares.
The main BSE index is up more than 11% so far in 2010, backed by net foreign portfolio investment of over $29 billion.
Mahindra & Mahindra Financial Services Ltd was up 1.7% at Rs 788.10 after the lender to rural and semi-urban areas said its board approved raising 5.7 billion rupees through a stake sale to institutions.
Ispat Industries rose more than 12% after the Economic Times newspaper reported ArcelorMittal may pick up a stake in the debt-laden Indian company.
Patel Engineering was up 2.8% at Rs 323.95 after the construction firm said it plans to raise up to Rs1000 crore by issuing securities to institutional investors.