Mumbai: The BSE Sensex extended gains to 2% on Monday afternoon, led by Reliance Industries and banks, as global stock markets traded higher after the Group of 20 pledged to keep stimulus in place until recovery was assured.
At 2:47pm, the 30-share BSE index was up 1.98% at 16,478.45 points, with 26 components in the green.
Energy giant Reliance Industries rose 3.4% after a newspaper said it was close to an overseas acquisition. The banking sector index was up 4.4%.
The 50-share NSE Index was up 2% at 4,894.15.
“Given the unleveraged balance sheet size and treasury shares held by the company, we continue to believe that Reliance Industries is likely to remain in a high-growth orbit,” Angel Broking said in a note, and maintained a ‘buy´ on the stock.
Top lender State Bank of India climbed 1.4 % to Rs2,234, after it said it had entered into an agreement with T. Rowe Price to sell a 6.5 % holding each in UTI Asset Management Company and UTI Trustee Company.
Private lender ICICI Bank firmed 0.5 % and HDFC Bank rose 1.2 %.
At 1:00pm, the 30-share BSE Index was up 214.20 points at 16372.48, with 14 components gaining. The 50-share NSE index was up 66.45 at 4862.60.
It rose as much as 0.7 in early deals, extending a rise of 4.9 % over the previous three sessions, but briefly turned negative in late morning trade as profits were booked.
“Global cues have been good. The foreign investors’ interest in our country is good. So, there is no bad news as such to pull the market down,” said R. Ganesh, director of Systematix Shares.
“A large upside is not likely, but at the same time a steep downside is also ruled out. We will see range-bound trade for some time unless there is a surprise from IIP (index of industrial production) numbers ” he added.
Industrial output data for September is due on Thursday.
On Sunday, the finance minister said the timing for winding down stimulus measures would be decided when it was apparent the economy is recovering, but there would be no more stimulus measures.
Prime Minister Manmohan Singh said on Sunday growth in the next fiscal year, assuming a normal monsoon season, was expected to be more than 7 % compared with a 6.5 % forecast for the 2009/2010 fiscal year.
In the broader market, gainers were nearly double the number of losers as around 138 million shares exchanged hands on the Bombay Stock Exchange.
Asian shares rose as investors bet policymakers may keep many stimulus measures in place until an economic recovery was on more solid footing, after the U.S. unemployment rate surged to a 26-1/2-year high.