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Sensex rises for a second day; RIL, Infosys gain

Sensex rises for a second day; RIL, Infosys gain
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First Published: Tue, Jun 07 2011. 11 22 PM IST
Updated: Tue, Jun 07 2011. 11 22 PM IST
Bangalore: Indian shares shrugged off a sluggish start and climbed for a second day on Tuesday, powered by energy major Reliance Industries Ltd (RIL) and software services bellwether Infosys Technologies Ltd.
A revival in buying by foreign institutional investors (FIIs) this month spurred demand for stocks that had fallen recently, but worries about the outlook remain with more rate increases in the offing to stem high inflation, traders said.
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Engineering and construction conglomerate Larsen and Toubro Ltd (L&T) and consumer goods leader Hindustan Unilever Ltd (HUL), stocks that had gained recently, were dumped.
The 30-share Bombay Stock Exchange (BSE) index rose 0.41%, or 75.51 points, to 18,495.62, with 18 of its components gaining ground. “With the FII figures positive in recent sessions, there is some genuine buying interest,” said Neeraj Dewan, director with Quantum Securities Ltd.
Foreign funds have bought $307 million of shares in June after pulling out $1.16 billion in May.
RIL, which has the heaviest weight on the index, rose 2.2% to Rs958.25 as investors bought the beaten-down stock.
Worries about decline in gas output from RIL’s blocks off India’s east coast have dragged down shares of the most valuable firm by 9.5% this year.
Infosys climbed 1.9%, leading a rebound in export-focused software services that dropped recently on worries about the pace of recovery in the US, the biggest market for these companies.
Bigger rival Tata Consultancy Services Ltd added 1.3%, while the third largest Wipro Ltd shed 1%.
Traders said investors were churning their portfolios and the outlook was still uncertain.
“The market is likely to be range-bound with investors watching inflation, interest rates and monsoon data,” Dewan said.
A government panel is expected to take a decision on Thursday to raise state-controlled diesel and cooking gas prices, a move that will accelerate inflation.
The central bank, which has said fighting price pressures was its priority even if that meant denting growth, is widely expected to raise key rates by at least 25 basis points on 16 June. It will be the 10th increase since mid-March 2010.
Data released last week had showed January to March growth in India was the slowest in five quarters.
Maruti Suzuki (India) Ltd reversed early losses and ended up 0.65%. Workers at its plant in Haryana have been on strike since Saturday, disrupting production and the stock had fallen as much as 1.7% early on Tuesday.
L&T ended 1.3% lower at Rs1,705.60, while HUL shed nearly 2% at Rs308.75.
The 50-share National Stock Exchange’s (NSE) Nifty was up 0.4% at 5,556.15 points.
Around 464 million shares changed hands on NSE, with gainers beating losers in the ratio of 1.4 to 1.
Karnataka Bank Ltd surged nearly 11% on market talk that the private sector lender planned to sell stake, several dealers said. The bank’s managing director and chief executive, Jayarama Bhat, denied the rumour and the shares trimmed gains to 6.1% at Rs120.85 by close.
Nucleus Software Exports gained 2.5% to Rs85.15 after the software firm said it had finalized a partnership with Turkey’s Gantek to expand its presence in that country.
ARSS Infrastructure Projects Ltd ended 2.3% higher at Rs457.20 after it won Rs207 crore orders from Madhya Pradesh Road Development Corporation for construction of road.
REUTERS
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First Published: Tue, Jun 07 2011. 11 22 PM IST
More Topics: Markets Update | India | Stocks | BSE | NSE |