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Markets rise 0.4%; L&T, Mahindra climb

Markets rise 0.4%; L&T, Mahindra climb
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First Published: Thu, May 27 2010. 11 14 AM IST
Updated: Thu, May 27 2010. 11 14 AM IST
Mumbai: Indian shares shrugged off a shaky start and climbed 0.4% on Thursday, supported by gains in their Asian peers but euro zone debt problems and foreign fund outflows were a drag.
Trade was choppy as investors adjusted their positions on the last day of monthly derivatives contracts on the National Stock Exchange.
Foreigners have dumped shares worth $2.3 billion so far in May in their biggest pullout since October 2008, as the deteriorating fiscal health in Europe triggered a flight to safety from risky assets.
Engineering conglomerate Larsen & Toubro, which is riding a surge in orders on the back of a pick-up in domestic growth, rose 1.2% to lead the gainers.
By 11:02am, the 30-share BSE index was trading up 0.37% at 16,448.36 points, with 18 of its components gaining. The 50-share NSE index was up 0.3% at 4,933.90.
“A technical bounceback is not ruled out,” said Vaibhav Sanghavi, director of Ambit Capital. “But for our market to really move up from here, the global situation has to stabilise first.”
The benchmark index is down more than 6% so far this month, but has performed better than the broader MSCI’s measure of Asian shares other than Japan that has lost more than 15%.
Morgan Stanley said on Wednesday India’s defensive behavior through the latest global turmoil was driven by an improving policy environment, resilient domestic growth and better corporate and government finances.
Still, the debt crisis in the euro zone could dent consumer spending in that region and slow a global economic recovery. It could also hit foreign portfolio holdings in India.
The Financial Times reported on Wednesday that China is reviewing its euro zone bond holdings because of growing concerns about gaping deficits in countries including Greece and Portugal.
Leading utility vehicle maker Mahindra & Mahindra extended gains for a second day after it agreed to buy 55% stake in electric car maker Reva, aiming to be a significant player in the global electric vehicle industry. The stock was up 2.7%, adding to gains of 0.6% on Wednesday.
Tata Steel shed as much as 2.3%, after the world’s eighth-largest steel maker warned late on Wednesday that rising raw material costs and the euro zone’s debt crisis could crimp profit growth. It reported a full year net loss after minority interest and share of profit of associates of Rs2,010 crore.
Reliance Industries, which has the highest weight on the Sensex, was up 0.2%.
The Economic Times reported the energy giant and Reliance Natural Resources Ltd will reach a gas supply agreement in the next two weeks, taking forward a patch-up between the billionaire Ambani brothers.
In the broader market, gainers were 1.4 times the number of losers on volume of 123 million shares.
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First Published: Thu, May 27 2010. 11 14 AM IST
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