BackMarkets recover on growth recovery hopes
Markets recover on growth recovery hopes
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Mumbai: Indian shares clawed back from a shaky start on Monday as hopes for strong domestic economic growth and earnings helped overcome weak global sentiment caused by subdued US economic data.
Reliance Communications rallied as much as 3.9% after Financials Times reported Emirates Telecommunications Corp (Etisalat) was close to buying a 26% stake in the No. 2 Indian telecoms firm.
Private-sector lender HDFC Bank was up 0.7% ahead of its quarterly earnings.
By 11:03am, the 30-share BSE index was trading up 0.22% at 17,994.71, with 17 of its components gaining. The benchmark had fallen as much as 0.6% in early trade.
In comparison, the MSCI’s broader measure of Asian markers other than Japan and world equities were down 1.1% and 0.3% respectively.
“India is definitely a better bet versus other investment targets," said Rajen Shah, chief investment officer at Angel Broking. “The economic growth in our country is robust. Also, we are not so export-dependent as other emerging economies. Earnings optimism is also helping," he said.
The BSE index is up 3% in the year to date. Its emerging market peers China’s Shanghai Composite Index and Brazil’s Bovespa have fallen 25% and 9.1% since the start of 2010.
The rise in Indian shares has been powered by foreign portfolio inflows of $8.4 billion so far in 2010, adding to last year’s record purchases of $17.5 billion.
Export-driven software majors dropped on concerns disappointing economic data from the United States, their biggest market, could affect outsourcing orders.
Sector leader Tata Consultancy Services was down 0.9%, while rivals Infosys Technologies and Wipro shed 0.8% and 0.2% respectively.
Energy giant Reliance Industries, which has the highest weight on the Sensex, was up 0.2%.
The Daily News & Analysis newspaper reported Reliance was in talks with Texas-based Quicksilver Resources, including for a possible buyout of the US firm that develops shale gas and coal-bed methane.
In the broader market, gainers outnumbered losers in a ratio of 1.7:1 on volume of 112 million shares. The 50-share NSE index was up 0.2% at 5,407.
STOCKS
Steelmaker Tata Steel was up 0.4% at Rs511.40 as UBS upgraded the stock to “buy" from “neutral" over the weekend.
Sun Pharmaceutical was down 1.5% at Rs1,713.05 after the drugmaker said a US court had denied its motion to reverse a jury verdict of infringement against the Indian firm on Pfizer’s Protonix acid reflux drug patent that the jury had said was valid.
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