Markets lose early gains to end 1% up on short covering

Markets lose early gains to end 1% up on short covering
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First Published: Thu, May 28 2009. 04 41 PM IST
Updated: Thu, May 28 2009. 04 41 PM IST
Mumbai: Indian shares rose 1.3% on Thursday as short-covering on the last day of monthly derivatives and strong results from engineering conglomerate Larsen & Toubro helped shrug off tepid markets across Asia and Europe.
Leading mobile operator Bharti Airtel bounced 3.4% after falling more than 10% over the past three days following revived merger talks with South Africa’s MTN.
The 30-share BSE index ended up 186.37 points at 14,296.01, with 20 stocks advancing, after briefly turning negative in early deals. The 50-share NSE index rose 1.4% to 4,337.10.
“Lots of companies, including L&T, have come out with solid results. This has given a real boost of confidence for the market,” Alex Mathew, head of research at Geojit BNP Paribas Financial Services, said from Kollam in southern Kerala state.
Expectations are high after the Congress party-led coalition won a second term and Finance Minister Pranab Mukherjee said the government needed to push long pending reforms in the financial sector and in the real economy to support growth.
Larsen gained 2.3% to Rs1,341.80 after its quarterly results beat forecasts and the company forecast robust orders.
The stock has jumped 36% after the ruling coalition since general election results nearly two weeks ago on hopes the government will increase infrastructure spending.
The BSE index has jumped by more than three-quarters from a 2009 low in early March, as increased investor confidence across the globe brought in about $5.5 billion of investments from foreign funds.
Maverick Indian investor Rakesh Jhunjhunwala believes bold reforms such as opening up the country’s insurance and pensions to foreigners will be critical to quell concerns about the market being pricey and sustain the stock market rally.
“Insurance, pension reforms are going to be extremely important for the stock market because the kind of money we’ll get from that is unbelievable,” Jhunjhunwala, dubbed by the media as India’s Warren Buffett, told Reuters in an interview.
He said the benchmark index could rise to 15,500 by the end of December.
India’s annual inflation was at 0.61% in the 12 months to 16 May, matching the previous week’s annual rise, government data showed on Thursday.
Energy giant Reliance Industries, which has the most weight in the main index, rose 1.5% to Rs2,219.90, while private-sector lender ICICI Bank added 2.7% to Rs729.50.
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First Published: Thu, May 28 2009. 04 41 PM IST
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