Mumbai: Metal makers led Indian shares 0.3% higher on Thursday, helped by a jump in base metal prices in London and rising domestic demand. Firmer Asian equities also underpinned the market.
A strong pick-up in foreign fund buying spurred short-sellers to cover their positions in monthly derivatives on the National Stock Exchange that expire on Thursday, traders said.
Reliance Industries, which has the heaviest weight in the main index, was trading up 0.4% at Rs1,063.25 after it struck a $1.36 billion deal to develop shale assets of Pioneer Natural Resources, boosting its presence in the US shale gas sector.
By 11:26 am, the BSE 30-share index Sensex was trading up 0.27% at 17,803.44, with 21 of its components gaining.
“There is short-covering due to expiry. Rollovers have been good,” said Gajendra Nagpal, CEO of Unicon Financial. He said with foreign funds turning net buyers the outlook had improved.
Foreign investors have bought around $1.7 billion of India equities so far this month, and helped the benchmark index rise more than 5% in the period.
In May, they had dumped shares worth $2 billion as euro zone’s fiscal troubles rattled investors.
Tata Steel, which ranks eighth amongst global steel makers, was trading up 1%, while non-ferrous metals producer Sterlite Industries rose 1.4% on firming metal prices.
London copper jumped aided by strong Japan output data and technical factors as it chases a peak touched earlier this week.
Engineering and construction conglomerate Larsen & Toubro was up 1.5%, after dropping more than 4% over two previous sessions.
Auto companies advanced on expectations for robust sales for June, dealers said.
Tata Motors was up 0.5%, while Mahindra and Mahindra and Hero Honda rose 0.6% and 0.4% respectively.
In the broader market, gainers beat losers in a ratio of 2.6:1 on volume of 159 million shares.
The NSE 50-share index Nifty was up 0.3% at 5,338.85.