Close: Populist Rail Budget nudges Sensex by 250 pts

Close: Populist Rail Budget nudges Sensex by 250 pts
Comment E-mail Print Share
First Published: Fri, Jul 03 2009. 05 00 PM IST
Updated: Fri, Jul 03 2009. 05 00 PM IST
Mumbai: Indian shares shrugged off an early fall and rose 1.7% on Friday, as investors covered their short positions ahead of an updated budget on Monday and helped the market to post its second consecutive weekly gain.
Rail freight and passenger fares were kept unchanged in a separate budget for the railways presented to parliament on Friday, and the main budget is widely expected to detail plans to further open up the economy and kick off asset sales.
Financial stocks, led by mortgage lender Housing Development Finance Corp, rose on hopes for incentives, while infrastructure-related stocks gained in anticipation of higher government spending.
Top engineer Larsen & Toubro, state-run utility NTPC and Bharat Heavy Electricals, all rose between 1.5 to 3%.
The 30-share BSE index rose 1.74%, or 254.56 points, to 14,913.05 points, with 23 components gaining. The index had slipped as much as 1.1% at one point, in volatile trade. The 50-share NSE Index rose 1.7% to 4,424.25 points.
It gained 1% on the week, its 16th weekly rise in 17 and has risen more than half this year on hopes for an economic recovery and expectations for a investor-friendly budget.
The market may have run too fast and could be in for disappointment if the budget falls short of expectations, analysts said.
There are doubts on how much the cash-strapped government can do to provide an economic stimulus to lift growth, traders said.
“I think the expectations are too high, and a knee-jerk reaction on the downside is possible, as it may not satisfy the market,” said R K Gupta, managing director at Taurus Asset Management.
HDFC rose 7.7% to Rs2,586.25, while State Bank of India gained 2.9% to Rs1,810.65 and ICICI Bank added 3.1% to Rs754.05.
Export-focused technology stocks rose, but gains were muted after US government data showed the US economy shed more jobs than expected in June, dampening the outlook for an economic turnaround there.
Top outsourcer Tata Consultancy Services ended up 0.3% at Rs391.40, Infosys, which reports quarterly results next week, rose 0.3% to Rs1,800.90, and Wipro gained 1.1% to Rs385.55.
Motorcycle maker Hero Honda, however, fell 1.1% to Rs1,369.60 on worries over growth outlook, a day after auto fuel prices were raised by as much as 10%.
In the broader market, advances narrowly beat declines in the ratio of 1.06:1 on above average volume of 355 million shares.
Comment E-mail Print Share
First Published: Fri, Jul 03 2009. 05 00 PM IST
More Topics: India | Stocks | Markets | Sensex | BSE |