New Delhi: Markets rose more than 1% on Wednesday morning after a three-day slide in the main index led to bargain-hunting, even as investors remain wary about the health of the global economy and rising local interest rates.
No. 3 lender HDFC Bank and software services bellwether Infosys led the gains in the main 30-share BSE index that was up 1.2% at 16,930.96 points by 10:53pm. All but eight of its components were up.
“Our markets are heavily oversold. That’s why we are seeing some sort of recovery,” said Alex Mathews, head of research at Geojit BNP Paribas.
“But it doesn’t mean that we are out of the woods. It is just a bounce back.”
The main index is down more than 17% this year to bec ome one of the world’s worst-performing equity markets. The 14-day relative strength index (RSI) of the main index had slumped to 27 at Tuesday’s close. A reading below 30 typically indicates oversold conditions.
“Quarterly numbers were not encouraging. We saw rising input costs and borrowing costs. There are still concerns of a further rate hike,” Mathews said.
The 50-share NSE index gained 1.11% to 5,091.55. But in the broader market 815 losers outpaced 535 gainers on total volume of 229 million shares.
HDFC Bank rose 3.4% to Rs 471.75 after losing nearly 5% in the previous two sessions. The banking sector index was up 0.5%.
Shares in Infosys, India’s No. 2 software services exporter, were up 2.3% at Rs 2,455.55, while its bigger rival Tata Consultancy was up 3.6% at Rs 1,008.40.
But top listed property firm DLF was down 3.1% at Rs 183, extending Tuesday’s 5.7% slide.
DLF was fined Rs 630 crore ($139 million) by the country’s competition watchdog on Tuesday after it found the company guilty of breaching laws regarding the unfair pricing of goods and services .
Tata Motors , the owner of luxury brands Jaguar and Land Rover, fell as much as 2.7% to its lowest in more than a year after the company said late on Tuesday its global sales in July fell 6% from a year earlier. The stock is down nearly 40% this year.
Japan’s Nikkei fell 0.4% on Wednesday but MSCI’s measure of other Asian stocks was up 0.9%.
Shares in Coal India were up 2% at Rs 394.95. HSBC upgraded the stock to “overweight” from “neutral” and raised its target price to 472 rupees from Rs 425.
Orchid Chemicals & Pharmaceuticals Ltd rose 2.8% to Rs 208.50 after the drugmaker said it resumed production at its active pharmaceutical ingredients plant in Chennai.