Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday

End: Markets rebound on short covering

End: Markets rebound on short covering
Comment E-mail Print Share
First Published: Wed, Jun 24 2009. 04 52 PM IST
Updated: Wed, Jun 24 2009. 04 52 PM IST
Mumbai: Indian shares erased an early fall and climbed 0.7% on Wednesday as investors covered their short positions ahead of the monthly derivatives expiry, but the market undertone was weak due to a delay in monsoon.
Larsen & Toubro, which lost nearly a tenth of its value in the last two weeks, led the gains on speculation the engineering and construction firm would benefit from expected higher spending on infrastructure.
The government’s annual budget on 6 July is expected to spell out bold plans to improve overburdened roads, ports and other infrastructure to help boost growth.
However, annual monsoon rains, which are a lifeline for the country’s trillion dollar economy, have weakened and are expected to be below normal, the government said on Wednesday. [
“The environment is not too positive, with the delayed monsoons and fiscal deficit. Monsoon could play havoc in rural demand story of two-wheeler makers and FMCG firms,” said D DSharma, vice-president at Anand Rathi Securities, referring to fast moving consumer goods.
The farm sector, which contributes about a sixth of economic output, is heavily dependent on the June-September rains for irrigation. Lower farm incomes usually squeeze demand for industrial goods.
The 30-share BSE index seesawed to end 0.69%, or 98.72 points, higher at 14,422.73 points, with 24 stocks rising. It opened up and quickly fell as much as 0.8% before rebounding 1.1% at one stage. The 50-share NSE index rose 1.1% to 4,292.95 points.
“Rollovers are not happening, investors are just closing positions with the uncertainty over the budget,” said Rajesh Jain, chief executive at Pranav Securities.
Forward contracts expire on the last Thursday of every month.
The benchmark has fallen 6.8% over the past two weeks on profit-taking after a 14-week rally that saw it jump 83%.
Foreign funds have been net sellers over the past week, cutting net inflows to about $7.5 billion from around $8 billion since mid-March.
Export-focused outsourcers rose on hopes the slowing inflows would push the rupee lower and boost margins of software exporters who are seeing a turnaround in client confidence.
Top outsourcer Tata Consultancy Services rose 4.3% to Rs382.05, its sharpest daily percentage gain in two weeks. Bellwether Infosys Technologies climbed 0.75% to Rs1,759.15.
Larsen & Toubro gained 1.5% to Rs1,508.85 and state-run Bharat Heavy Electricals Ltd ended 2.7% higher at Rs2,193.15.
State-run Oil and Natural Gas Corp rose 2.4%, to Rs1,051 ahead of its annual results.
Private-sector lenders ICICI Bank and HDFC Bank were pulled down by fresh worries about a nascent economic recovery. ICICI Bank fell 1.2% to Rs689.35, while HDFC Bank slid 1.97% to Rs1,456.35.
Reliance Industries, which has the most weight in the main index, eased 0.8% to Rs2,000.10.
In the broader market gainers led losers in the ratio of more than 2 to 1 on more than average volumes of 477.2 million shares.
Asian shares rose, with Japan’s Nikkei up 0.4%, while MSCI’s measure of other Asian markets climbed 2%.
European stocks recovered from five-week lows ahead of a US Fed decision at 11:45pm, that is seen to dampen expectations for higher interest rates.
Comment E-mail Print Share
First Published: Wed, Jun 24 2009. 04 52 PM IST
More Topics: India | Stocks | BSE | NSE | Markets |