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Markets log 4-week closing high as world stocks gain

Markets log 4-week closing high as world stocks gain
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First Published: Wed, Sep 07 2011. 05 30 PM IST
Updated: Wed, Sep 07 2011. 05 30 PM IST
New Delhi: Markets added 1.2% on Wednesday to log their highest close in four weeks, tracking strong Asia and Europe, with Reliance Industries and lenders leading the broad gains aided by a perk up in sentiment.
World stocks rose from a two-week low on Wednesday and the euro rebounded across the board after Germany’s top court rejected lawsuits aimed at blocking Germany’s participation in bailout packages for Greece and other euro zone countries.
Reliance Industries , which has the heaviest weight on the main index, extended gains on expectations the energy major will be able to step up flagging gas output off the country’s east coast. The stock closed up 1.46% at Rs 833.50.
BP Plc’s India unit head Sashi Mukundan had said on Tuesday that the oil giant was confident of raising output from Reliance Industries’ KG D6 block.
Lenders State Bank of India , HDFC Bank and ICICI Bank gained between 0.91 and 3.3% on the day on growing expectations that the central bank may hold rates at its 16 September policy review.
“We are following the European market and high beta-stocks that were badly beaten down are now seeing buying,” said Vikas Khemani, president at Edelweiss Capital.
The benchmark 30-share BSE index closed up 202.19 points at 17,065, its highest closing high since 10 August. The index rose for a second straight day, with 25 of its components closing in the green.
Better-than-expected data on the US services sector and Australian growth as well as speculation that Washington may unveil a $300 billion package to create new jobs also helped improve the global market sentiment.
Cement and construction firm Jaiprakash Associates jumped 7.62% to Rs 71.35 on a newspaper report that it was in talks with Mexico’s Cemex and South America’s Votorantim Group to sell up to 26% stake in its cement business.
A spokesman for Jaiprakash Associates said he did not have an immediate comment.
Realty shares gained with top realtors DLF closing up 2.64% and second-largest Unitech gaining 7.36% on bargain hunting.
Power utilities also rose on value buying. The sectoral index rose more than 2%. Top utility NTPC , private utility Tata Power and Adani Power all closed around 3.5% higher.
Foreign funds have bought shares worth $450 million this month until Tuesday after selling about $2 billion in August.
“Nothing has changed fundamentally for India in the past few days. It’s just a pullback rally,” said Deven Choksey, managing director at brokerage K.R. Choksey.
The BSE index is down nearly 17% this year as rising interest rates and worries about the health of the global economy drove investors away from risky assets. The 50-share NSE index closed 1.19% higher at 5124.65 points.
In the broader market, there were three gainers for every declining stock on a total volume of about 745 million shares.
The MSCI’s measure of Asian markets other than Japan was up 2.68%, while Japan’s Nikkei gained 2.01% on Wednesday.
STOCKS
Shree Renuka Sugars ended 4.23% higher, after rising as much as 5.75% following a newspaper report that it was in talks to sell a 25% stake in its Brazilian unit. The company later clarified it has received proposals for stake buy.
Syndicate Bank closed up 2.48% at Rs 105.55 after a newspaper report said Aviva Life Insurance Company India, a local arm of the UK insurer Aviva , may sell as much as 30% stake to the state-run Indian bank.
Kalindee Rail Nirman Engineers Ltd ended about 4% higher at Rs 121.45, after rising as much as 7.8% earlier after it received a contract for about $15 million from Bangladesh Railway.
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First Published: Wed, Sep 07 2011. 05 30 PM IST
More Topics: Markets Update | India | BSE | NSE | Sensex |