BackMarkets gain 1% as world oil prices drop
Markets gain 1% as world oil prices drop
PremiumMumbai: Main stock index extended gains to 1% on Friday, tracking firmer Asian markets, as world oil prices came off highs.
The 30-share BSE index was trading up 1 percent to 17,810.89 points at 12:55pm. The 50-share NSE index was up 1.2% at 5,327.70.
Shares pulled back 0.8% earlier, a day after tumbling 3%, as global oil prices came off highs and the United States began moves to end the Libyan crisis helping calm investor nerves.
However, trade was choppy with the government set to unveil a budget for state monopoly Indian Railways at noon, and ahead of the main federal budget on Monday.
Read Mint’s report leading to opening
Financials, which had fallen sharply on Thursday amid worries inflation pressures would trigger more rate increases, led the rise. Top lender State Bank of India rose 3% and rival ICICI Bank firmed 2.7%.
Auto shares fell on fears the annual budget may increase taxes on the sector. Bajaj Auto, Hero Honda and Maruti Suzuki were down between 1 and 1.5%.
“The market is expecting a hike in excise duty. Inflation may edge up affecting interest rates and petroleum prices may go up too. This will affect the margins of corporates," said R.K. Gupta, managing director of Taurus Mutual Fund.
Tata Motors, however, was up 3.4%. “Tata is not as impacted by a possible hike in excise duty beacause of their global footprint," said Deven Choksey, managing director and CEO of KR Choksey Shares.
By 10:28am, the 30-share BSE index was trading up 0.77% at 17,768.30 points, with 19 of its components advancing.
The benchmark had posted its biggest one-day slide in 16 months on Thursday, spooked by a jump in world oil prices. India imports more than two-thirds of its oil requirement.
“Oil has corrected and we are seeing a bounce back in Asian markets. The oil fears have come down," said Ambareesh Baliga, senior vice president at Karvy Stock Broking.
Oil stabilised on Friday after a sharp reversal from a 2-year peak overnight, calming concerns that a surge in prices would hurt economy recovery.
The 50-share NSE index was up 1.07% at 5,318.95 points.
The MSCI’s measure of Asian markets other than Japan was up 1.16%, while Japan’s Nikkei was trading up 0.49%.
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