Close: Sensex up 2%, best close since early Jan

Close: Sensex up 2%, best close since early Jan
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First Published: Wed, Mar 25 2009. 04 53 PM IST
Updated: Wed, Mar 25 2009. 04 53 PM IST
Mumbai: Indian shares shrugged off choppy Asian markets and rallied 2.1% on Wednesday to their highest close since early January, boosted by short covering ahead of the expiry of monthly derivatives contracts.
The rise, for the third straight session, took gains to 20% from the 2009 low hit on 6 March, helping the market recoup most losses caused by the corporate fraud unveiled by outsourcer Satyam Computer Services 7 on January.
Energy giant Reliance Industries and HDFC Bank led the rally, but traders said there was resistance and mobile operator Bharti Airtel and Oil & Natural Gas Corp dropped.
The 30-share BSE index firmed 2.08%, or 196.86 points, to 9,667.90, its best close since 6 January, the day before Satyam said it had overstated profits for many years and triggered a market slide. The 50-share NSE index rose 1.6% to 2,984.35.
The benchmark had started 0.3% lower and seesawed through the day, rising as much as 2.5% at one stage.
D D Sharma, vice president at Anand Rathi Securities, said the rise was underpinned by the derivatives expiry on Thursday.
“Short sellers need to cover their positions when the market is moving up with only one day left for the futures settlement,” he said.
Twenty-two of the index components rose while in the broader market, gainers marginally led losers 1,271 to 1,221 on heavy volume of 346.7 million shares.
Traders said potential risks for a sustained upside were the slowing economy and political instability worries. A Reuters poll showed inflation in mid-March was probably near zero, an all-time low since annual records started in 1977/78.
An alliance led by the ruling Congress Party has lost ground over the last week amid coalition squabbles, but is still likely to win India’s April-May general election, a Reuters poll of 14 leading analysts has predicted.
Economic growth is forecast to fall below 6% to a seven-year low in 2009/10 after the global crisis hits Asia’s third-largest economy harder than expected.
Reliance Industries, which has the heaviest weight in the main index, rose 5.6% to Rs1,533.40, as it gets set to pump gas from its Krishna Godavari basin field off India’s east coast. The stock has leaped almost 44% since 13 January, when it hit the year’s low of Rs1,067.10. HDFC Bank climbed 3.6% to Rs974.40.
ONGC, which had risen 8.9% over the previous five trading sessions, fell 2% to Rs763.70, and Bharti, which had climbed 5.7% over the same period, shed 2.1% to Rs591.05.
Satyam Computer fell 3.1% to Rs40.50 after Spice Group said it may withdraw from the race to buy the struggling outsourcer due to a lack of desired transparency in the bidding process.
Asian shares retreated from two-month highs as investors assessed whether a US plan to deal with banks’ toxic debt would revive the financial system and help pull the economy out of recession.
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First Published: Wed, Mar 25 2009. 04 53 PM IST
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