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Midsession: Sensex rises 1% on short covering

Midsession: Sensex rises 1% on short covering
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First Published: Fri, Jul 10 2009. 02 59 PM IST
Updated: Fri, Jul 10 2009. 02 59 PM IST
Mumbai: Indian shares extended gains to 1% on Friday afternoon as day traders covered their short positions ahead of the weekend, but the market was on course to its biggest weekly fall in almost five months.
Infosys Technologies, India’s No.2 software outsourcer, led the rise climbing 4.7% to Rs1,756.10.
By 2:20pm, the 30-share BSE index was up 0.9% at 13,882.96 points, with 18 components gaining, after rising as high as 13,897.19. The 50-share NSE index was up 1.15% at 4,128.05 points
Markets were choppy as investors took profits on economic worries, but outsourcing bellwether Infosys Technologies rallied after its quarterly profit beat market forecasts.
Shares in Infosys rose as much as 3.7% after the No. 2 software services exporter reported a 17.2% quarterly profit and raised its full-year forecast at the lower end on hopes for a pick up in outsourcing demand from overseas clients.
However, the 30-share BSE Index was trading up 0.15% at 13,777.44 points by 12:37pm, with half of its components gaining. The 50-share NSE Index was up 0.39% at 4,096.45 points.
Listen to Mobis Philipose analyse the Infosys Q1 results
The index is down 7.9% so far this week and is headed to post its second weekly fall in 18 weeks. On Monday, it had fallen 5.8% after the budget failed to live up to market expectations.
Traders said concerns about monsoon rains, the lifeline for the country’s domestic demand-led economy, was one factor weighing on the market.
The rains were 8% below normal in early July, reviving after the driest June in 83 years, but water in the main reservoirs has more than halved, putting at risk even winter-sown oilseeds and wheat.
There were also concern that foreign funds may lock in profits if the world economic recovery takes time.
Foreigners have moved nearly $6 billion into Indian stock in 2009, including almost $1 billion this month. This has helped lift the benchmark BSE index 43% so far this year.
“After the steep fall on budget day some amount of buying from foreign funds was quite natural,” said Ambareesh Baliga, vice president, Karvy Stock Broking. “But we do not expect that to be sustained in the future.
Suraj Saraogi, managing director of Keynote Capitals, said world economic worries would impact inflows.
Higher than expected industrial output in May failed to lift sentiment. Output rose 2.7% in May, above a Reuters poll forecast of 1.4%.
Infosys, which gets more than half its revenue from the United States, was trading up 2.88% at Rs1,725.
Other outsourcers also rose. Top software exporter Tata Consultancy Services was up 2.1% at Rs396.70, while No.3 Wipro rose 3.9% to 386.30.
Tata Steel, the world’s sixth-largest steelmaker, was up 1.9% at Rs371.15 after the company said late on Thursday more jobs were at risk at its Corus unit in Europe as it aligned employment costs with expected steel demand.
In the broader market there were 1,200 gainers to 1,083 losers on moderate volume of 150.4 million shares.
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First Published: Fri, Jul 10 2009. 02 59 PM IST
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