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Markets recover previous losses to close up 0.6%

Markets recover previous losses to close up 0.6%
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First Published: Thu, May 20 2010. 04 17 PM IST
Updated: Thu, May 20 2010. 04 17 PM IST
Mumbai: India’s main stock index nudged up 0.7% on Thursday, a day after falling to its lowest close in two-and-a-half months, but lingering concerns about the euro zone woes kept investors wary.
Energy explorer Oil and Natural Gas Corp jumped to a 3-1/2-month-high after the government nearly doubled the price of natural gas state companies produce in the first increase in almost five years.
Leading mobile firms Bharti Airtel, Reliance Communications and Idea Cellular initially rallied following the end of a frenzied auction for 3G mobile licences, but the cheer was short-lived and the stocks closed mixed.
The 30-share BSE index closed up 0.68%, or 111.19 points, at 16,519.68, after rising 1.3% during trade. Eighteen of its components ended in the green. The 50-share NSE index climbed 0.6% to 4,947.60.
“In the short run, we will continue to be dictated by global developments,” said Rajat Rajgarhia, director of research at Motilal Oswal Financial Services.
“But I think we have seen a healthy correction which is eventually making valuations attractive to buy.”
The benchmark index has dropped 5.9% this month as foreign funds withdrew almost $1 billion during the period on waning risk appetite following debt problems in Europe.
Foreigners are still net buyers of $5.6 billion this year. In 2009, record inflows of $17.5 billion had helped the index jump 81%.
ONGC rose 8.7%, logging its best single-day gain in the past one year, to 1,118.20 rupees. Oil India, another state-run energy firm, jumped 9.1% to 1,259.80 rupees.
Goldman Sachs said the gas price hike would boost ONGC’s consolidated earnings per share for fiscal years 2011-2013 by 6-12%.
“We continue to prefer state-owned upstream stocks over oil marketing companies, which remain dependent on the upstream and government for subsidies,” the U.S. brokerage said in a note.
Bharti, which is paying $2.6 billion for third generation mobile licence, gave up most of its 2.4% early rally and ended up 0.2%. Rival Reliance Communications erased early gains of 5.8% and closed 0.7% lower.
Proceeds from the costly 3G auction reached $14.6 billion, or nearly double the government estimate.
“We believe the fractured 3G outcome and ongoing uncertainty on spectrum policy/pricing offsets the positives i.e. traffic reversion in 2HFY10 and marginalization of new operators,” Citigroup analysts said in a note, maintaining a “cautious” stance on the sector.
The bank sector index gained 0.9% after sliding 6.3 over four days.
Top lender State Bank of India rose 2.2% and rival ICICI Bank gained 1%. Mortgage lender Housing Development Finance Corp climbed 1.5%.
State utility Satluj Jal Vidyut Nigam closed at Rs25.05, below its issue price of 26, on debut that is unlikely to inspire investers in upcoming government offerings.
In the broader market, declining shares outnumbered advancing ones in a ratio of 1.5:1, on relatively lower volume of 325 million shares.
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First Published: Thu, May 20 2010. 04 17 PM IST
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