Midsession: Markets extend gains to 1% on global optimism

Midsession: Markets extend gains to 1% on global optimism
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First Published: Fri, Aug 28 2009. 02 40 PM IST
Updated: Fri, Aug 28 2009. 02 40 PM IST
Mumbai: Indian shares extended gains to 1% on Friday afternoon as increased confidence the global economy was on the road to a sustainable recovery boosted equity markets worldwide.
At 2:31pm, the 30-share BSE index was up 0.9% at 15,920.14 points, with 19 stocks gaining, after climbing to 15,944.46 earlier. The 50-share NSE index was up 0.9% at 4,732.
The US economic contraction in the second quarter was not as bad as expected, and gross domestic product actually grew if inventories were stripped out, raising hopes that pent-up demand for Asia’s exports would return slowly.
Energy giant Reliance Industries rose 0.6% to Rs2,051.45 as oil prices rose further above $72 on Friday after snapping a two-day fall from 10-month highs a day ago.
Engineering and construction firm Larsen & Toubro, which climbed 1.1% to 1,617.40 rupees, and private-sector lender ICICI Bank, which advanced 1.5% to 761.90 rupees, were the other major gainers.
Top telecoms firm Bharti Airtel, which is in exclusive merger talks with South Africa’s MTN, added 4.1% to Rs433.60.
MTN wants to conclude the proposed tie-up with Bharti quickly to end any doubt about the deal, but doesn’t rule out interest in part of Kuwaiti firm Zain.
Bharti and MTN hope to finalise by mid-September a deal that could lead to a full merger, with the Indian firm adding another adviser and getting closer to lining up loans, three sources have told Reuters.
“The underlying economic conditions in countries around the world are certainly improving, so I am not surprised that liquidity is chasing stocks once again,” Deven Choksey, chief executive of K R Choksey Shares & Securities, said.
The index has risen 0.7% in August, after it fell earlier in the month on worries about a weak monsoon, high valuations and looming inflation.
While the global equity rally that has lasted since March sputtered a bit in August, a rush liquidity pouring into emerging markets has propped up shares across Asia.
However, having already priced in an upturn in the global economy, investors are looking for more signs that growth can be sustained once the impact of massive global government stimulus spending fades, traders say.
There are also worries stocks may have moved ahead of economic fundamentals and could be due for a correction.
In the broader Indian market on Friday, gainers led losers by more than 1.5 to 1 on relatively heavy volume of 169.1 million shares.
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First Published: Fri, Aug 28 2009. 02 40 PM IST
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