Mumbai: The BSE Sensex rose 0.3% on Wednesday after two days of declines, helped by a small lift in Chinese and European stocks, but investors continued to be wary as worries over euro zone debt problems lingered.
Top mobile operator Bharti Airtel surged as much as 6.7%, after it closed its $9-billion acquisition of African operations from Kuwait’s Zain in a deal that makes the Indian firm the world’s fifth biggest cellphone company by subscribers.
The stock which had shed 3.8% in the previous day in a weak Mumbai market, rose the most in more than 6 months as it closed 5.6% higher at Rs272.15.
Top lender State Bank of India reversed early gains and slipped 0.5% after chairman O. P. Bhatt said the bank expects to launch a 200-billion-rupee ($4.2 billion) rights issue in the second half of 2010/11.
The 30-share BSE index climbed 0.25%, or Rs40.79 points, and finished at 16,657.89 points, with 19 of its components gaining. The benchmark had lost 2.9% in the previous two sessions. The 50-share NSE index closed 0.3% higher at 5,000.30.
”While the expectations from the domestic front with regards to growth are promising, there are concerns over the euro zone’s debt problems and foreign fund outflow,” said V.P. Chaturvedi, managing director of Tata Asset Management.
Foreign funds have been net sellers for $9 million of Indian equities so far in June, after pulling out $2 billion last month.
They have been sellers for three of the first five trading days this month.
“We have not collapsed yet because of the positive developments on the domestic front. We are still holding on,” Chaturvedi said.
Finance minister Pranab Mukherjee said on Tuesday India could maintain an 8.5% growth in 2010/11 despite the euro zone problems, provided there is a normal summer monsoon.
Financials gained on expectations demand for credit would pick up in the world’s second-fastest growing major economy. Top private lenders ICICI Bank and HDFC Bank climbed 1.2% each. Mortgage lender Housing Development Finance Corp rose 0.2%.
Energy giant Reliance, which has the highest weight on the main index, closed 1% higher, after sliding 3.4% over three sessions.
State-run energy firms edged up on market talk that a ministerial panel on fuel price reforms could meet very soon.
Explorer Oil & Natural Gas Corp rose 2.2% while state-run oil marketing companies Bharat Petroleum Corp, Hindustan Petroleum Corp and Indian Oil Corp gained between 1.2% and 2.4%.
Shares in the companies had fallen on Tuesday, a day after the government held off the decision to hike fuel prices after two powerful ministers stayed away from the meeting of the panel, signalling opposition to the move on fears of voter backlash ahead of local polls over the next year.
Non-ferrous metals producer Sterlite Industries rose 3.3% as London copper futures jumped on reports that China’s total exports surged in May, showing the economic strength of the world’s top consumer of the metal.
Tata Steel (TISC.BO), world’s eighth-largest steel-maker by output, rose 2.2% while Hindalco rose 0.6%.
In the broader market, gainers outpaced losers in the ratio of 1.1:1, in relatively low volume of 289 million shares.
Elsewhere, the FTSEurofirst 300 index of top European shares and MSCI’s measure of Asian markets other than Japan were up 0.2% each by 3:44pm.