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Markets rise 1.9%; Reliance, banks lead

Markets rise 1.9%; Reliance, banks lead
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First Published: Mon, Oct 24 2011. 12 33 PM IST

Updated: Mon, Oct 24 2011. 12 33 PM IST
New Delhi: Shares rose as much as 1.9% on Monday, with index heavyweight Reliance Industries and banking stocks leading the gains, as investors grew optimistic about renewed efforts by European leaders to limit the region’s debt crisis.
European Union leaders appeared closer on Sunday towards a plan to contain the euro zone’s sovereign debt crisis, nearing agreement on bank recapitalisation and leveraging their regional rescue fund.
“The market is up today because investors expect European leaders to reach a solution on Wednesday...once that is solved, money will again get distributed in different asset classes,” said Deven Choksey, managing director at KR Choksey Securities.
The EU will take a final call on strategy to fight the euro zone’s sovereign debt crisis on Wednesday, but sharp differences remain over the size of losses private holders of Greek government bonds will have to accept.
Investors also shrugged off the possibility of an interest rate increase by India’s central bank on Tuesday when it meets to review policy.
Top lender State Bank of India rose 1.4%, while No. 2 player ICICI Bank gained 2.2%. The sector index rose 1.8%.
“There are two negative sentiments, one that RBI may raise rates again, and two that rupee may depreciate further,” Choksey said.
However, sentiment for banking stocks was positive on the finance minister’s comments last week that an adequate amount will be provided for capitalisation of SBI and other state-run banks, he said.
At 10:50am, the main 30-share BSE index was up 1.6% at 17,054.17 points, with three of its components in the red.
The 50-share NSE index was trading up 1.6% at 5,130.90 points. In the broader market, there were about three gainers for every loser on a volume of about 131.5 million shares.
Reliance Industries, India’s top listed firm with the highest weightage to the index, rose 1.7% to 849.70 rupees.
Airline stocks rose, after local media reports that India will shortly consider a proposal to allow foreign airlines to pick up stakes in cash-strapped domestic carriers.
Kingfisher Airlines gained 2.2%, while Spicejet rose 3.4%. Jet Airways , India’s largest carrier by market share, rose 2% to Rs 237.35.
The MSCI’s measure of Asian markets other than Japan was up 3.3% and Japan’s Nikkei gained 1.6%.
STOCKS
Polaris Software rose 8% after it raised its revenue outlook for 2012 to between 20.1 billion and Rs 2,060 crore from between 1,968 crore and 2,014 crore on Saturday.
Paint maker Akzo Nobel India Ltd fell 9% after its parent Akzo Nobel NV abandoned its 2011 core profit guidance and said it would cut 500 million euros ($690 million) of costs, in a bid to offset higher raw material prices and as softening demand spread to China.
Blue Star fell 5.5% after it reported a loss for July-September.
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First Published: Mon, Oct 24 2011. 12 33 PM IST
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