Close: Sensex rises 3.8% on global recovery hopes

Close: Sensex rises 3.8% on global recovery hopes
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First Published: Wed, May 27 2009. 04 32 PM IST
Updated: Wed, May 27 2009. 04 32 PM IST
Mumbai: Indian shares rose 3.8% on Wednesday to their highest close in more than a week, in line with Asian peers after a jump in US consumer morale reinforced expectations the global economy was starting to recover.
Sentiment was also bolstered by finance minister Pranab Mukherjee’s comments the government needed to push long pending reforms in the financial sector and in the real economy to support growth.
“One of the first steps I propose to take is to meet bankers and get them committed to a more benign plan of action,” he said, addressing his first news conference after the ruling coalition was re-elected for a second term.
Banks such as ICICI Bank and State Bank of India jumped on hopes rate cuts and an economic recovery would boost loan growth and reduce the threat of defaults.
Bharti Airtel, which is in merger talks with South Africa’s MTN to create an emerging markets telecoms giant, fell for the third day as the proposed deal weighed.
The 30-share BSE index ended up 3.83%, or 520.41 points, at 14,109.64, with 27 stocks advancing. The 50-share NSE index rose 3.95 at 4,276.05.
The benchmark has gained three-quarters of its value from a 2009 low in early March, riding a global rally and fuelled by about $5.5 billion of investments from foreign funds.
“We are back on our feet with the positive news flow from the US High beta stocks such as banks are leading on the back of economic growth expectations,” said Jayesh Shroff a fund manager at SBI Mutual Fund.
Oil and Natural Gas Corp climbed 9.4% to Rs1,107.85, its highest close in almost nine months and Reliance Industries rose 2% to Rs2,187.20 after oil rose to its 2009 high.
Top engineer Larsen & Toubro firmed 4.5% to Rs1,311.40 buoyed by the possibility of rising orders from construction, infrastructure and industrials. The firm is scheduled to announce annual results on Thursday.
Metal producers Sterlite Industries gained 9.5% to Rs591.15, near nine-month closing high, and Hindalco Industries Ltd firmed 2.1% to Rs81.55 on firmer metal prices.
Government-run State Bank of India, the country’s top lender, rose 6.1 to Rs1,790.55, and private-sector ICICI Bank climbed 6.6% to Rs710.55.
Shares in leading telecoms firm Bharti Airtel, which had fallen more than 10% in the past three days on concern the proposed MTN deal would dilute its earnings initially, eased 0.2% to Rs768.90.
In the broader market, gainers led losers by more than 5 to 1 on heavy volume of 705.4 million shares.
An index of US consumer confidence surged in May, strongly topping expectations as it registered the biggest monthly jump since April 2003, according to the Conference Board, an industry group.
Asian markets rose to a seven-month peak after the overnight Wall Street rally. Japan’s Nikkei rose 1.4%, while MSCI’s measure of other Asian markets rose 2.4%.
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First Published: Wed, May 27 2009. 04 32 PM IST
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