BackShares rise 2% on bargain hunting
Shares rise 2% on bargain hunting
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Bangalore: Bargain hunting lifted Indian shares for a second day on Thursday after the market had skidded more than 12% since the start of January, but traders said the bounce may be short-lived on risk averse global sentiment.
Realty and infrastructure firms led the rise as investors saw value in the beaten down sector, which has been roiled by rising borrowing costs and commodity prices.
The Bombay Stock Exchange (BSE) 30-share index Sensex rose 1.98%, or 358.69 points, to 18,449.31, with all but one of its components gaining ground.
Engineering and construction conglomerate Larsen & Toubro climbed 3.7%, while top-listed property developer DLF added 7.4%.
“You still cannot say the markets are out of the woods yet. We expect a downward to sideways movement due to more selling by foreign funds," said Ambareesh Baliga, vice president at Karvy Stock Broking.
The escalation of violence in Egypt could dampen risk appetite among global investors, and rising oil prices should put upward pressure on inflation in India which imports about 80% of its oil requirement.
The benchmark index is down 10% in 2011, hit by foreign fund outflows of $1.5 billion, after rising 17% last year on record inflows of $29.3 billion.
Data on Thursday showed food inflation had accelerated to its highest level since 25 December on rising prices of onions and petrol, straining headline inflation and strengthening a case for more monetary tightening.
India has been battling soaring prices and the Reserve Bank of India (RBI) has raised key rates seven times since last March.
Top telecom firm Bharti Airtel climbed 5.1%, to Rs339.80, extending the previous day’s gains as some analysts were optimistic about its future earnings growth after it posted a bigger-than-expected 41% drop in quarterly profit.
Rival Reliance Communications closed 0.85% higher at Rs118.05.
Software stocks rose on optimism about growth outlook. Infosys Technologies rose almost 1% while larger rival Tata Consultancy added 0.5%.
India’s software and services exports are seen rising 16-18% in the year to March 2012, an industry body said on Wednesday, as demand from Western clients is expected to remain strong. Export revenue for the year to March is also seen higher than the body’s earlier forecast.
Business activity in India’s services sector grew at a faster clip in January than in the previous month, boosted by new orders and expectations of solid growth, but costs also soared, a survey showed on Thursday.
Leading lenders State Bank of India and ICICI Bank were up 3.1% and 2.1% respectively.
In the broader market, gainers led losers in the ratio of 1.7:1 on relatively lower volume of about 267 million shares.
The National Stock Exchange (NSE) 50-share index gained 1.7% to 5,526.75.
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