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Sensex rises 0.4%; lenders climb

Sensex rises 0.4%; lenders climb
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First Published: Wed, May 11 2011. 10 50 PM IST
Updated: Wed, May 11 2011. 10 50 PM IST
Mumbai: Indian shares ticked 0.4% higher on Wednesday, buoyed by firm world equities, but the gains lacked conviction as foreign funds mostly passed up Indian equities on concerns that rising interest rates could stifle the pace of economic growth.
Financials rebounded after declining earlier this month. The banking sector index recovered 0.5% in the day, but is still down 3.7% for the month.
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Ranbaxy Laboratories Ltd jumped 6.1% after the top drug maker by sales reported a lower-than-expected fall in quarterly net profit late on Tuesday.
The 30-share Bombay Stock Exchange (BSE) index climbed 0.39%, or 72.19 points, to 18,584,96, with 23 of its components closing in the green. It swung between positive and negative territory in the day.
The 50-share National Stock Exchange (NSE) index, or Nifty, firmed 0.4% to 5,565.05.
“It looks like the Indian market gained today as world stocks were doing good,” said Sunder Subramaniam, senior manager of sales at brokerage Sharekhan Ltd. “Also, there are some expectations being built ahead of tomorrow’s (Thursday’s) IIP (Index of Industrial Production) data,” he said, referring to the industrial output data for March.
Industrial output in Asia’s third largest economy probably rose 3.8% in March from a year earlier, helped by strong exports and infrastructure output, but weighed by a high base effect, the median forecast in a Reuters poll showed.
Foreigners have dumped more than $1 billion of stocks in nine out of the 11 sessions to Monday, latest data from the market regulator showed.
“FIIs (foreign institutional investors) know that the Indian market is not going to run up in a big way any time soon,” said Arun Kejriwal, director of research firm KRIS.
“With average earnings and interest rate issues, which may hurt economic growth, where is the bullishness?” he added.
Last week, the Reserve Bank of India stepped up its fight against rising prices, increasing interest rates more than expected and vowing to battle price pressures even at the cost of some economic growth.
After the market closed for trade, finance minister Pranab Mukherjee said the economy may not grow around 9% in the current fiscal due to volatility in international commodity prices and supply constraints.
Gainers beat losers in the ratio of 1.4:1 in the broader market on a volume of nearly 500 million shares on NSE, lower than the 30-day average daily volume of 659 million shares.
Brokerage Edelweiss Securities Ltd forecast the Nifty would be range-bound at 5,500 to 5,650 in the short term.
Lenders rebounded with State Bank of India, ICICI Bank Ltd and HDFC Bank Ltd rising between 0.1% and 1.8%.
Software firms gained after poor sector performance in recent sessions. The sector index firmed 0.8%, but was still down nearly 7% since the end of the March quarter.
Infosys Technologies Ltd and Wipro Ltd gained 0.9% and 0.7%, respectively, while bigger rival Tata Consultancy Services Ltd closed barely changed.
The MSCI world equity index was up 0.4% by 1023 GMT, while the Thomson Reuters global stock index firmed 0.3%.
Microfinance lender SKS Microfinance Ltd gained 10% to Rs 328.50 after losing 34% over Friday and Monday. SKS’ bounce for a second consecutive day—it had risen to close up 10% on Tuesday—follows predictions of consolidation in the industry and a troubled outlook for the company for another two quarters.
Oracle Financial Services Software Ltd jumped 10.8% to Rs 2,187.85, after the software firm said its fiscal 2011 net profit rose by 43.5%.
Jubilant Life Sciences Ltd rose 5% to Rs 167.50 after the drug maker forecast robust growth in revenue and operating profits in fiscal 2012 on higher capacity utilization.
REUTERS
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First Published: Wed, May 11 2011. 10 50 PM IST
More Topics: India | Stocks | BSE | NSE | Sensex |