Mumbai: Indian shares extended gains to more than 2% on Friday afternoon as investors built long positions after a 7.2% drop over the past two weeks and strong Asian and European markets providing support.
At 2:15pm, the 30-share BSE index was up 2.1% at 14,640.66 points, with 24 stocks gaining.
The 50-share NSE index was up 2.3% at 4,338.65.
Main stock index rose 0.8% in the morning as energy giant Reliance Industries, private-sector lender ICICI Bank and engineering and construction firm Larsen & Toubro led the gains.
Sun Pharmaceutical Industries tumbled as much as 17.6% after US officials said authorities seized all medicines produced by its Caraco Pharmaceutical Laboratories unit, following repeated violations of manufacturing standards.
By 11:19am, the 30-share BSE index was up 0.8% at 14,454.26 points, with 21 stocks advancing. The 50-share NSE index was up 1% at 4,282.65.
“The market has come off its highs in the past two weeks or so, and any good news from now on will only lead to investors taking up long postions,” Hitesh Agrawal, head of research at Angel Stock Broking, said.
The benchmark snapped a 14-week, 83% jump, last week as investors took profits. There are also worries a below-normal monsoon forecast will hurt demand in the crucial rural heartland and hit corporate profitability.
Investors are, however, pinning hopes the government’s budget on 6 July unveil pro-market reforms such as privatisations and relaxation of foreign investment rules.
“Everyone is eyeing the budget, and some may just take a shot at the budget expectations being met. So we could see a rally of about 700 points over the next week,” Agrawal said.
Larsen climbed 3.4 percent to Rs1,579.50, while ICICI Bank rose 3.2% to Rs721.35.
Reliance, which has the most weight in the main index, advanced 1.3% to Rs1,984.10.
Sun Pharma, the country’s largest drugmaker by market value, was down 12 percent at Rs1,142.65.
In the broader market, gainers led losers by almost 2 to 1 on relatively moderate volume of 109.4 million shares.
Asian shares were higher on Friday, with Japan’s Nikkei up 1%, while MSCI’s measure of other Asian markets rose 1.4%.