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Markets at 2-month high; metal makers rally

Markets at 2-month high; metal makers rally
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First Published: Mon, Jun 21 2010. 11 30 AM IST
Updated: Mon, Jun 21 2010. 11 30 AM IST
Mumbai: Indian shares rose to their highest level in more than two months on Monday, with commodities among the gainers after China’s pledge to make the yuan more flexible encouraged risk appetite.
Non-ferrous metals producer Sterlite Industries jumped 7.3% while Tata Steel, the world’s eighth-largest steelmaker, rallied 4.6% and aluminium firm Hindalco firmed 4.3%.
Late on Saturday, China’s central bank said it was ready to make the yuan more flexible, citing a global recovery and more balanced external trade.
Although it ruled out a one-off move and said there was no basis for any big appreciation, the pledge for a more flexible yuan lifted copper and other base metals prices on Monday.
By 10:57am, the 30-share BSE index was trading up 1.83% at 17,893.71, after hitting as much as 17,894.04, its highest since mid-April. All of its components advanced. The 50-share NSE index was up 1.8% at 5,356.20.
“China’s yuan move is helping risk-taking ability. Also, commodities are doing very well, helping the market further, said Ambareesh Baliga, vice-president of Karvy Stock Broking.
Foreign funds have been stepping up investments in Indian equities, with net purchases of about $890 million so far this month after withdrawing $2 billion in May.
The BSE index has gained 5.6% in June, after sliding 3.5% last month.
Financials climbed on hopes loan demand would rise on the back of rapidly expanding economy.
Also, the government on Saturday said life insurers could sell unit-linked insurance plans without seeking approval from the Securities and Exchange Board of India, ending a spat between regulators over the product.
“The news definitely comes as relief to banks with stakes in insurance companies. It was an issue which needed quick resolution,” said Baliga.
Leading lender State Bank of India was up 1% while rivals ICICI Bank and HDFC Bank climbed 3.4% and 0.6% respectively.
Energy giant Reliance Industries, which has the highest weight on the Sensex, climbed 1.1% to Rs1,067.
In the broader market, gainers were nearly thrice the number of losers on volume of 106 million shares.
Edelweiss Capital jumped 9.8% to Rs464.50 after the financial services firm said after market hours on Friday its board would consider a stock split and bonus issue on 24 June.
Maytas Infrastructure was down 2% at Rs207 after opening higher as the Saudi Binladin Group agreed to invest 20% in the company at 195.30 rupees per share, dealers said.
Oil explorer Cairn India, a unit of UK’s Cairn Energy, rose 1.5% to Rs310 as crude oil prices firmed.
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First Published: Mon, Jun 21 2010. 11 30 AM IST
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