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Business News/ Opinion / Online-views/  Markets hit 25-month high; banks up, techs fall
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Markets hit 25-month high; banks up, techs fall

Markets hit 25-month high; banks up, techs fall

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Mumbai: Indian shares climbed to their highest level in more than 25 months on Monday, with financials leading the charge as investors focused on their long-term outlook on the back of robust economic growth.

Traders said firm Asian equities also underpinned the market after a three-day weekend, but rising costs of raw materials posed a risk to earnings of manufacturers and could halt the rally.

By 11:17am, the 30-share BSE index was trading up 0.7% at 17,819.20 points, with 23 of its components gaining, after hitting 17,822.79 -- its highest since February 2008. The 50-share NSE index was up 0.8% at 5,330.75.

“Our market is going up because world markets are doing good. But it does not have the charm and aggressiveness to rise to higher peaks from here," said Nilesh Doshi, president of equities at Techno Shares.

He said rising raw material prices could crimp profit margins of companies, and if the cost is passed on it could hurt demand.

“Earnings are likely to be good. But the market will not give a big salute," Doshi said.

Top lender State Bank of India climbed 1% and rival ICICI Bank rose 2.3%. Energy major Reliance Industries, which has the highest weight on the Sensex, was trading 1.4% higher at Rs1,109.

Auto makers rose on the back of robust sales in March.

Leading motorbike maker Hero Honda gained 2.7% after March sales climbed 17% from a year earlier, while top vehicles maker Tata Motors edged up 0.3% on a 38% jump in March sales.

Software companies that get most of their revenue from exports bucked the trend and dropped on worries a rising rupee would squeeze their margins.

Infosys Technologies and Wipro fell 0.2% and 0.4% respectively, while sector leader Tata Consultancy Services shed 0.3%.

Last week, median forecasts from 35 foreign exchange strategists showed the partially convertible rupee strengthening to 43.53 against the dollar by March 2011, due to surging flows on funds.

In the broader market, gainers were more than thrice the number of losers on volume of 191 million shares.

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Published: 05 Apr 2010, 11:03 AM IST
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