Mumbai: Indian shares extended gains to 1% on Thursday afternoon, as investors covered their short positions ahead of the expiry of monthly derivatives contracts.
At 2:16pm, the 30-share BSE index was up 1.03% at 15,329.66 points, with 21 stocks gaining. The 50-share NSE index was up 0.8% at 4,551.15.
Markets switched between positive and negative territories in the morning as muted markets across Asia on fears that China may seek to regulate credit growth kept investors cautious.
Possible regulatory action in China is unlikely to affect India directly, but investors were using it as an excuse to take profits on a recent rally after some results from top firms disappointed during the week, traders said.
“The market just does not like such news. Apart from what is happening in China, data shows US consumer confidence is also low, so all this again questions the extent of the global economic recovery,” Hitesh Agrawal, head of research at Angel Broking, said.
There were little new triggers for the market to move up after a spate of strong results over the previous two weeks boosted the market about 14%, dealers said.
“The market will likely languish at these levels over the short-term,” Agrawal said.
Energy giant Reliance Industries fell 0.5% to Rs1,917.65, while diversified cigarette maker ITC slid 0.8% to Rs235.45 in morning trade on Thursday.
Tata Steel was another major loser, dropping 1% to Rs437.10, a day after it missed forecasts with a 47% fall in quarterly net profit from its Indian operations.
But government-run State Bank of India, which is set to report results at about 1:00pm, rose 1.1% to Rs1,674.40, while no. 2 outsourcer Infosys gained 1.4% to Rs2,011.80.
By 11:27am, the 30-share BSE index was up 0.3% at 15,214.79 points, with 18 stocks advancing, after opening down 0.2%. The 50-share NSE index was up 0.2% at 4,524.25.
Upbeat earnings reports in the past few weeks have driven global stock markets higher and prompted investors to take on more risk in their portfolios as they grow increasingly confident the world economy is on the path to recovery.
However, India’s benchmark is down 1.3 percent this week, following its rise over the previous two weeks, as disappointing results from Reliance Industries, Hindustan Unilever, Sun Pharmaceutical and Tata Steel weakened the market momentum seen since mid-July.
Sun Pharmaceutical fell 2.7% to Rs1,156, while leading utility vehicle maker Mahindra & Mahindra advanced 0.3% to Rs844 on Thursday.
In the broader market, gainers led losers 1,261 to 927 on relatively moderate volume of 121.3 million shares.
Most Asian markets were choppy on Thursday, with Japan’s Nikkei up 0.6%, while MSCI’s measure of other Asian markets rose 0.2% after falling earlier.