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Markets up 1.5%; financials, Bharti gain

Markets up 1.5%; financials, Bharti gain
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First Published: Thu, Jun 10 2010. 04 18 PM IST
Updated: Thu, Jun 10 2010. 04 18 PM IST
Mumbai: Indian shares climbed 1.6% on Thursday, rising for the second day, helped by a rebound in world markets, but dealers were sceptical if the gains could be sustained as the euro zone’s ongoing fiscal woes weighed.
Financials topped gainers even as food and fuel prices quickened at the end of May, which could prompt monetary tightening by the central bank, as investors were optimistic loan demand would pick up in a growing economy.
Asian stocks were boosted by robust Chinese exports and upbeat comments by the Federal Reserve about the US economy boosted investor sentiment, while European stocks marched ahead of several key central bank interest rate decisions.
The 30-share BSE index rose 1.59%, or 264.19 points, to finish at 16,922.08, but the index is still down 1.1% this week. The 50-share NSE index rose 1.6% to 5,078.60.
Twenty-nine of its components closed in the green.
“No bad news is sometimes good news,” said Arun Kejriwal, director of research firm KRIS.
“The market is bouncing back as we are not hearing any negative developments in Europe for today. But the question is can these gains be sustained.”
For the year ahead, Kejriwal said the course of the Indian market will depend on how global issues shape up.
“Volatility is going to be around for a long time,” he added.
Foreign funds were sellers for half of the first six trading sessions this month, and were net buyers of about $84 million of stocks so far in June.
Euro zone debt concerns had prompted them to dump nearly $2 billion worth of stocks in May, sending the benchmark sliding 3.5% in the month, its first monthly decline since January.
Federal Reserve chairman Ben Bernanke said the economic recovery in US appeared to be on solid footing and that while a double-dip recession “can never be entirely ruled out,” he expects the economy to continue growing.
Also, China’s exports jumped in May, beating forecasts of a 32% gain and reassuring investors about the economy’s strength.
Top lender State Bank of India firmed 2.4% while ICICI Bank and HDFC Bank climbed 0.3% and 1.7%, respectively. Mortgage lender Housing Development Finance Corp gained 1.7%.
Bharti Airtel extended Wednesday’s gains and climbed 4.8% after a top official told Reuters the leading mobile operator would offer affordable rates in Africa to boost usage but has no plan to launch a price war. Mukesh-Ambani led Reliance Industries gained 0.9% after the Economic Times reported it was looking to enter the telecoms market when the opportunity arises, with a focus on selling phone and Internet services to companies.
Top engineering and construction firm Larsen & Toubro rose 1.8% as it said its unit had won orders worth 7.47 billion rupees.
Avendus Securities said large Indian IT Services companies are poised to see a revival, with volumes likely to report a three-year compounded annual growth rate of around 20%.
It initiated coverage on Tata Consultancy, Infosys and Wipro with an “add” rating. Sector leader TCS rose 2.1% while Infosys and Wipro gained 0.7% and 1.9%, respectively.
In the broader market, gainers were double the number of losers on a relatively low volume of 288 million shares.
Elsewhere, the MSCI’s measure of Asian markets other than Japan climbed 1% by 1033 GMT, while the pan-European FTSEurofirst 300 <.FTEU3> index of top shares climbed 0.7%.
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First Published: Thu, Jun 10 2010. 04 18 PM IST
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