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Markets rise 1.4%; up for 3rd week in row

Markets rise 1.4%; up for 3rd week in row
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First Published: Fri, Nov 20 2009. 04 52 PM IST
Updated: Fri, Nov 20 2009. 04 52 PM IST
Mumbai: Indian shares climbed 1.4% on Friday and helped stretch weekly run of gains to three in a row, after higher European markets lifted investor confidence from an early slide.
Banks led the gainers with sentiment also boosted by an assurance the government was not planning to tax foreign capital inflows.
Montek Singh Ahluwalia, deputy chairman of the Planning Commission and a close confidant of the prime minister, told Reuters the government wants an increase in foreign investment and there was no proposal to tax overseas funds.
Curbs on foreign inflows imposed by Brazil and Indonesia have raised worries other countries may tighten rules to stem their strengthening currencies as investors move money into faster growing economies.
The 30-share BSE index closed up 1.41%, or 236.20 points, at 17,021.85, taking gains for the week to 1%. Twenty-six components closed in the green.
The benchmark is up more than 76% this year, supported by foreign portfolio investment of $15.4 billion. In 2008, the index had fallen more than a half as foreigners pulled out over $13 billion.
“If the rally gains momentum and crosses 18,000-18,500, we will move from a stretched valuation scene to a bubble zone,” said A.V. Srikanth, executive director of private wealth management at Anand Rathi Financial Services.
State Bank of India and ICICI Bank, the country’s top two lenders, gained 2.4% and 1.3% respectively.
“Banking sector is looking good, as with the economy growing the sector has good potential,” said R. Ganesh, director of Systematix Shares.
Energy giant Reliance Industries rebounded 2.1% to Rs2,125.15, after falling more than 3% over three days on the absence no major announcement at its annual general meeting earlier this week.
Outsourcers climbed on improving outlook in their main markets in the United States and Europe. Infosys Technologies jumped to a record high of Rs2,447, before settling at 2,427.50, up 0.75%.
Sector leader Tata Consultancy gained 2% and smaller rival Wipro firmed 0.7%.
Top vehicle maker Tata Motors closed 1% higher at Rs642.20, after CLSA upgraded the stock to ‘outperfomer´ from ‘sell´ on Thursday.
“We now recognise that JLR’s demand environment is better than we expected and, combined with cost-cutting measures, should support a strong profit rebound over FY11-12,” CLSA said in a note, referring to Tata Motors’ Jaguar Land Rover brands.
Bharti Airtel dropped 1.4% to Rs288.75, after the leading mobile operator said it had launched a new bill plan that would slash mobile roaming rates by nearly 60%.
In the broader market, gainers outpaced losers in the ratio of 1.2:1 on moderate volume of 411 million shares.
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First Published: Fri, Nov 20 2009. 04 52 PM IST
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