Mumbai: Indian shares were pushed and pulled near a record high on 3 January, as bullishness about India’s biggest IPO was countered by losses in foreign markets on worries about a U.S. downturn and record oil prices.
Shares in Reliance Energy Ltd, which plans to launch an initial public offering for its Reliance Power unit on 15 Jan, rose as much as 6.9% to a record high of Rs2,528, taking its gains since 31 Dec to 18.4%.
The IPO of Reliance Power, 50% owned by Reliance Energy, could raise up to $3 billion, making it India’s biggest ever IPO. Final regulatory approval of the IPO is pending.
“The market is giving a thumbs-up to Reliance Power’s IPO and is confident of it doing well because there is lot of faith in the company management’s ability to execute large projects,” said Sandeep Shenoy, strategist at PINC Research.
That helped limit the fall-out from losses in Asian and U.S. markets after weak U.S manufacturing data and a jump in oil prices to $100 a barrel renewed fears the U.S. economy could slip into recession.
At 10:38 a.m. (0508 GMT), the BSE 30-share index was down 0.13% or 25.94 points, at 20,439.36, with 25 components falling. The index had opened down 0.4 %, but rose to a high of 20,518.53 points, just 0.05% away from record high of 20,529.48 on 2 January.
In the broader market 1,822 gainers lead 906 losers on volume of more than 267 million shares.
Though Indian banks and financial firms do not have a direct exposure to the U.S. housing slump and credit crisis, poor global sentiment towards financials hit their shares, and outsourcers fell on fears of the impact of a economic slowdown in the United States, which accounts for more than half their revenue.
Leading private bank ICICI Bank fell 0.9% to Rs1,255.50, and HDFC Bank Ltd was down 1% to Rs1,699. Second-ranked software services exporter Infosys Technologies Ltd. lost 1% to Rs1,732, and Wipro Ltd fell 1.2% to Rs505.
“The health of the U.S. economy is on the top of everybody’s mind, even in India,” said Arun Kejriwal, strategist at research firm KRIS. “It now needs to be seen in which markets the deep-pocketed investors from the U.S. will put their money,” he said.
Shares in top cigarette maker ITC Ltd fell 1.9% to Rs217. The stock had gained 12.6 % over the previous seven sessions. The 50-share NSE index, which hit a life high of 6,209.45 in early deals, was up 0.1% at 6,185.50.
Elsewhere in the region, Karachi’s 100-Share index was up more than 3% after three days of sharp losses due to political uncertainty following last week’s assassination of opposition leader Benazir Bhutto. Colombo’s All-Share index was down 0.47% at 2,548.09.