BackMarkets rebound; Sensex ends 64 pts up
Markets rebound; Sensex ends 64 pts up
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Mumbai: Indian shares nosed up 0.4% on Tuesday, led by automakers Mahindra & Mahindra, Tata Motors and Maruti Suzuki after the market shed 5.6% over the past three sessions.
But worries that a shortfall in crucial monsoon rains will hit economic growth, concerns over pricey stocks and mixed overseas markets kept investors wary.
Top utility vehicle maker Mahindra & Mahindra rebounded 3.6% to Rs785 after dropping 17.6% over the past three sessions.
Leading carmaker Maruti Suzuki rose 3.2% to Rs1,291.85 and No. 1 vehicle maker Tata Motors advanced 6.8% to Rs428.25, after easing 13.1% and 11%, respectively, since Thursday.
Automobile shares have been the second best performer this year, powered by higher sales for six months in a row and unexpectedly strong earnings in the June quarter on lower commodity prices.
Energy giant Reliance Industries, India’s biggest listed firm with the most weight in the main index, gained 0.7% to Rs1,999.45, after falling 4.3% over the past three days.
Top telecoms firm Bharti Airtel, which is in exclusive talks with South Africa’s MTN, climbed 2.2% to Rs382.50, a day after falling 2.5% on fears it may have to sweeten its bid for a deal to come through.
But top mortgage lender Housing Development Finance Corp fell 1.1% to Rs2,302.70, and engineering and construction firm Jaiprakash Associates slipped 2.6% to Rs208.50, limiting gains in the main index.
“This is just a temporary pull-back after the recent fall.Even though there is buying at lower levels, it is accompanied by heavy selling," said Arun Kejriwal, strategist at research firm KRIS. "The market is not able to sustain its gains."
The 30-share BSE index .BSESN ended up 0.43%, or 64.82 points, at 15,074.59, with 19 stocks advancing. Trading was choppy, with the benchmark rising as much as 1.4% and falling almost 1% at one stage. The 50-share NSE index .NSEI rose 0.8% to 4,471.35.
“There was a case for the market to find some support at these levels, but one can’t attribute too much of credibility to this support," Gajendra Nagpal, chief executive of Unicon Financial, said.
More than a quarter of India’s districts are facing the threat of drought and the sowing of crops nationally is 20% lower than in the previous year, finance minister Pranab Mukherjee said on Tuesday.
While many of these districts are not major crop producers, the minister’s statement underscored growing government concern that a weak monsoon could reduce output of crops like rice and dampen economic growth already hit by a global recession.
The BSE index had slid 3.25 percent last week after jumping 16% over the previous three weeks, when it rode a worldwide equities rally on better-than-expected corporate earnings and improving signs of a global economic recovery.
The index has leapt 87 percent from a 2009 low in early March, and is up more than 56 percent this year after slumping by more than half in 2008.
This has raised concerns about rich valuations, but analysts say a rush of liquidity pouring into emerging markets will help support the market in the near term. Foreigners have bought shares worth $7.2 billion this year.
In the broader market, gainers led losers 1,366 to 1,291 on below-average volume of 340.6 million shares.
Asian shares were higher, with Japan’s Nikkei rising 0.6%, while MSCI’s measure of other Asian markets was up 0.3%.
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