Mumbai: Indian shares were trading 0.3% higher on Monday, lifted by firm world equities, but were off early highs as traders cashed in gains at higher levels. Financials led the gains.
Tata Steel jumped as much as 3.7% to Rs529 after the world’s seventh-largest steelmaker’s unit Corus said on Friday it had reached an agreement with Thailand’s SSI over the potential $500 million sale of its mothballed Teesside plant in northern England.
“While a $500 million valuation looks very low on a replacement cost basis, we believe that considering TCP’s (Teesside cast products) structurally high cost and loss-making operations, this still represents an optimal outcome for Tata Steel,” Edelweiss said in a note late Friday.
The brokerage has a “buy” rating on the stock and said it expects the focus to shift to the high margin Indian operations and a re-rating of the stock.
By 10:24am, the 30-share BSE Index was up 0.34% at 18,059.76 points, with 22 of its components gaining. It rose as much as 1.2% in early deals.
In the broader market, advancing shares were nearly thrice the number of declining ones in a volume of 107 million shares.
The 50-share NSE index, or Nifty, was up 0.3% at 5,425.95 points.
“We are entering a correction mode. Our market opened up tracking global cues, but there was profit booking at higher levels,” said D.D. Sharma, senior vice-president of research at brokerage Anand Rathi.
“But, a serious correction will happen only if Nifty falls below 5,350 level. Until then, we will remain in a minor correction mode.”
The BSE index is up 3.3% this year, outperforming MSCI’s emerging markets index which is down 1.3% so far in 2010.
Financials marched on the Reserve Bank of India governor’s comment last Friday that growth in India was getting more broad-based and that inflationary pressures were easing.
Leading lender State Bank of India firmed 0.2% while closest rival ICICI Bank rose 1.4%. Private lender HDFC Bank bucked the trend and shed 0.8%.
Mortgage lender Housing Development Finance Corp was up 1%.
Asian stocks were firm tracking Wall Street’s gain, which on Friday rose over 1.5% on technical-related buying despite dour comments from the Federal Reserve chairman.
In Asia, Japan’s Nikkei was up 1.6%, while MSCI’s measure of Asian markets other than Japan climbed 1.2%.
NTPC Ltd was up 0.3% at Rs196.50 rupees after the state-run utility said it has signed a preliminary agreement with Bangladesh Power Development Board for developing the power sector in the neighbouring country.
Pantaloon Retail rose 0.9% to Rs477.75 rupees, after the country’s largest-listed retailer said its full-year consolidated net profit rose more than 6 times.