Mumbai: Indian shares eked out modest gains in volatile trade on Thursday as investors discounted the government’s reform intentions in an annual survey and waited for specific announcements in the budget early next week.
The country could see growth of around 7% this year and more in coming years if it makes sweeping reforms including removal of fuel subsidies, and speeds infrastructure development, the survey said.
“This is only a statement of intent. Honestly, we will have to wait for the actual budget for direction,” said Deven Choksey, managing director at K R Choksey Shares & Securities.
The budget will be presented to parliament on Monday.
State-run oil firms led by Oil and Natural Gas Corp were key gainers after India unexpectedly raised gasoline and diesel prices, while Reliance Industries fell on uncertainty about a gas supply deal with a former group firm.
The 30-share BSE index rose 0.09%, or 13.02 points, to 14,658.49 points, with 17 components in the red. The index rose nearly 0.8% at one point, but profit-taking then pushed it down more than 1% in the afternoon. The 50-share NSE Index closed up 0.2% at 4,348.85 points.
“The conviction is missing in the market, and profits are being booked at higher levels. A big problem is that index heavyweights such as Reliance, Bharti and Larsen & Toubro are not participating,” Choksey said.
The benchmark index has risen 52% this year, largely on high expectations for reforms to further open up the economy after the coalition government won a second five-year term in May with more seats in parliament.
Investors expect the government to unveil pro-reform measures in the budget such as 3G wireless spectrum auction and stake sales in state firms to raise cash. [
Oil firms rallied on expectation of easing subsidy burden incurred from selling products at discounted rates. On Wednesday, the government raised petrol and diesel prices by as much as 10% the first increase this year.
ONGC rose 7% to 1,126.45 rupees and gas transporter GAIL added 7.9% to 310.45 rupees. Oil marketing firms Indian Oil Corp rose 1.5% to Rs549.35 and Hindustan Petroleum Corp gained 2.7% to Rs319.75.
Tata Steel rose 6.4% to Rs420.15, its highest close in more than two weeks, on the company’s plans to sell global depositary receipts worth about $600 million.
Top aluminium producer Hindalco gained 1.4% to Rs84.55 rupees after lenders agreed to relax terms of a $982 million bank loan. The stock had fallen 3.5% on Wednesday after it reported profits fell sharply in 2008/09.
Uncertainty over a gas supply deal pulled down Reliance Industries, which has the maximum weightage in the BSE index.
The stock fell 2.3% to Rs2,010.15 after it said it would appeal to the Supreme Court against a ruling to enter into an unfavourable gas supply deal with former group firm Reliance Natural Resources Ltd.
Shares of auto firms fell on worries higher fuel prices may hit demand for vehicles.
Top car maker Maruti Suzuki shed 1.5% to Rs1,053.80, largest vehicles maker Tata Motors slipped 1.7% to Rs294.30, while motorcycle maker Hero Honda fell 1% to Rs1,384.55.
In the broader market, advances outpaced declines in the ratio of 1.3:1 on above-average volume of 373.2 million shares.