Mumbai: Indian shares rose 0.5% on Tuesday, snapping a three-day losing streak that had taken them to a six-week closing low, with banks, telecom and metals firms leading gains as stronger global markets boosted sentiment.
Top private bank ICICI Bank contributed most to the market’s rise with a 1.95% gain and sector leader State Bank of India rose 0.9%, as investors saw long-term value after both stocks had fallen this month.
Leading telecoms Bharti Airtel and Reliance Communications gained 3.8% and 1.6% respectively, again as some investors saw value after the sharp slide in the sector in recent months.
The stocks are the worst performers in the main index this year, with Bharti down 10% and Reliance 25% in a market that has risen by nearly three-quarters in 2009.
“In telecom, we are seeing bottom fishing and value buying, as the sector has been a big laggard this year,” said Ratnesh Kumar, CEO of institutional equities at Anand Rathi. “But the prices are only bouncing around the bottom levels without any meaningful breakout from the recent downturn,” he said.
The 30-share BSE Index rose 90.80 points to 16,692.00 points, with 17 components gaining. On Monday, the market had posted its lowest close since 10 November. The 50-share NSE index closed 0.67% higher at 4,985.65.
“Higher regional and global markets have helped our market move up today. Otherwise, there is nothing much happening. Volumes are low ahead of the holiday season,” Kumar said.
Indian stock markets are shut on 25 December and 1 January for holidays.
In the broader market, gainers lead losers by 1,709 to 1,123. Volumes were low, with 319 million shares changing hands on the Bombay Stock Exchange.
Aluminium maker Hindalco climbed 3.65%, copper producer Sterlite Industries rose 0.55%, and Tata Steel, the world’s eighth-largest steel maker by output, rose 4%.
The metals producers were boosted by expectations of better demand in 2010, said R. Ganesh, director of Systematix Shares.
Outsourcing stocks were among the losers. The sector has been a stronger performer this year with sector leader Tata Consultancy <TCS.BO> tripling in value and second-ranked Infosys Technologies more than doubling, and both hitting record highs.
On Tuesday, TCS dropped 1.2% and Infosys eased 0.3%.
Energy giant Reliance Industries ended up 0.2%. It said it had made a gas discovery in one of its exploration blocks in the Krishna Godavari basin off the country’s east coast.