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Noon: Sensex regains17k level; banks, Sterlite up

Noon: Sensex regains17k level; banks, Sterlite up
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First Published: Mon, Nov 16 2009. 01 03 PM IST
Updated: Mon, Nov 16 2009. 01 03 PM IST
Mumbai: The BSE Sensex rose more than 1% on Monday morning to its highest in more than three weeks, led by gains in banks and supported by strength in Asian markets.
Leading banks State Bank of India and ICICI Bank rose, helped by a view that economic conditions were improving and the long-term outlook for the sector was positive.
”At present, we believe that the operating environment for banks is positive, with sufficient liquidity and low interest rates,” First Global Securities said in a note of Friday.
”Going forward, there will be a pick-up in credit growth, as companies, particularly in the Infrastructure segment, are coming back to banks for their working capital requirements and project finance,” it said.
State Bank rose 2.8% to Rs2,362 while ICICI climbed 1.6% to Rs923.75.
At 1:21pm, the 30-share BSE Index was trading up 1% at 17046.16, with 26 components gaining. The 50-share NSE index was up 0.9% at 5062.40.
The benchmark rose above 17,000 for the first time since 23 October, and has gained more than 7% this month.
”The market has risen in line with global markets. But, we are still cautious as it seems to be purely a liquidity-driven rally,” said Ambareesh Baliga, vice-president of Karvy Stock Broking.
The benchmark index is up more than three-quarters in 2009, boosted by net foreign fund buying of nearly $15 billion of stocks.
Metals producer Sterlite Industries was up 2.9% at Rs861.90 after a US federal judge issued a ruling supporting a bid by rival Grupo Mexico for Asarco LLC.
JPMorgan said in a note that while Sterlite could appeal against the decision, it expected it would not appeal given the extended court process and the likely overhang on the stock.
”This, in our view, is a positive given the company would now focus on other key events in the near term,” JPMorgan said.
Top vehicle maker Tata Motors rose 3% to Rs638, after the Financial Times said Jaguar Land Rover was expected to announce it has secured a 170 million pound working capital facility from GE Capital.
Export-driven software firms were weaker as the rupee rose to its strongest against the dollar in nearly a month.
”We are cautious on the IT sector on an appreciating rupee and rising cost pressure,” said Baliga.
Top software services company Tata Consultancy was down 1%, Infosys Technologies had lost 0.6% and Wipro was down 0.9%.
In the broader market, gainers led losers in a ratio of 2.4:1 in volume of 101 million shares.
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First Published: Mon, Nov 16 2009. 01 03 PM IST
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