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Sensex up 0.2%; state oil cos, RCom drop

Sensex up 0.2%; state oil cos, RCom drop
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First Published: Tue, Jun 08 2010. 10 57 AM IST
Updated: Tue, Jun 08 2010. 10 57 AM IST
Mumbai: Sensex crept higher on Tuesday tailing gains in Asian markets, but investors were circumspect on uncertainties in the debt-ridden euro zone that has weighed on global sentiment for many weeks.
State-run explorer Oil and Natural Gas Corp and state refiners Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp fell between 1.2% and 5.5% after the government deferred till next week a decision on raising fuel prices.
Reliance Communications, which had jumped 26% in four sessions as talks swirled about a possible stake sale, eased 1% after AT&T denied media reports it was in talks.
Financials gained on expectations demand for loans will pick up as the economy advances.
By 11:13 am, the 30-share BSE index was trading up 0.21% at 16,815.86 points, with 21 of its components gaining.
“Investors are still sceptical about investing in riskier assets,” said KK Mital, head of portfolio management services at Globe Capital.
“More negative news from Europe cannot be ruled out. It may not be severe but the sentiment will take time to improve.”
Foreign funds, which pulled out almost $2 billion from Indian equities in May as euro zone’s debt woes hit risk appetite, have bought around $37 million of stocks so far in June.
State Bank of India, the country’s largest lender, rose 1.5%, while rival HDFC Bank rose 0.2%.
Mortgage lender Housing Development Finance Corp climbed 1.6%.
Price pressures will start to ease if the country gets a normal monsoon season but the central bank will further tighten monetary policy, deputy governor Subir Gokarn said on Tuesday.
He also said the government may put off reducing fuel subsidies for the foreseeable future to avoid hurting consumers who are already suffering from high food prices.
“From a political and welfare perspective, it is difficult to impose on them a hike in fuel prices at the time when they are already dealing with high food prices. Balancing out these two factors will drive the timing,” Gokarn told reporters on the sidelines of a Nomura investment conference in Singapore.
Oil & Natural Gas Corp, which is required to partly subsidise fuel prices, was trading down 1.2%.
Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum were trading 3-5.5% lower. The refiners are only partly compensated by the government for selling fuel at state-set lower prices.
In the broader market, gainers were more than twice the number of losers on volume of 89 million shares.
The 50-share NSE index was up 0.3% at 5,047.
Stocks on the move
Metals makers Sterlite Industries, Hindalco, Tata Steel and Jindal Steel and Power rose between 0.9 and 1.8%, as London copper futures rose nearly 1% after shedding almost $900 in a six-day selling spree.
Oil explorer Cairn India, a unit of UK’s Cairn Energy, rose 1.5% to Rs295.50 as crude oil prices gained towards $72 per barrel.
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First Published: Tue, Jun 08 2010. 10 57 AM IST
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