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Markets at 2-week closing high, buck global trend

Markets at 2-week closing high, buck global trend
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First Published: Fri, Sep 02 2011. 05 09 PM IST
Updated: Fri, Sep 02 2011. 05 09 PM IST
New Delhi: Markets rose 0.9% on Friday, snapping five straight weeks of fall, to log their highest close in more than two weeks as investors continued with bargain hunting, shrugging off slower growth in new manufacturing orders in one of the worst performing markets in the world this year.
Energy major Reliance Industries , which has the biggest weightage on the benchmark index, added 2.92% at Rs 805.45, contributing the most to the index’s rise.
The benchmark 30-share BSE index , rose for a third straight session, closing up 0.87%, or 144.71 points to 16,821.46, with 19 of its components gaining. The index, which rose as much as 1.9% earlier, is still down nearly 18% in 2011.
The rise in Indian shares was in stark contrast to their global peers, which slipped as European shares snapped a four-day rally, as investors braced for US jobs data that could reinforce concerns the world’s biggest economy is losing steam.
Factory sector expanded at its slowest pace in more than two years in August as export orders shrank amid weakening global demand, a survey of manufacturers in Asia’s third-largest economy showed.
“The idea mainly is not to allow people to go short and make money, so the weekend was ended on a positive note. But going forward, Monday could be a completely different game,” said Arun Kejriwal, strategist at research firm KRIS.
“It’s more of a corrective pullback, a cheater’s rally, it seems too good too fast.... We could be in for a second round of selling starting Monday,” Kejriwal said.
Automobiles also rose 2.1% as investors picked up beaten-down stocks on hopes of a pick up in sales driven by the festive season.
India’s festive season runs from August to November, which is typically considered as an auspicious time to make big-ticket purchases.
Mahindra & Mahindra , the No. 1 utility vehicle maker , gained 3.65%, while two-wheeler maker Hero MotoCorp , in which Honda Motor Co sold a 26% stake this year, gained 1.02% to close at Rs 2,072.75, its highest level in more than one year .
But shares in Maruti Suzuki , India’s top car maker, bucked the trend, shedding 1.15% to close at Rs 1078.95, a day after posting weak August sales.
Indian markets were closed on Wednesday and Thursday for local holidays.
Banks, which has the highest sectoral weightage on the benchmark index, also contributed to the gains. Top lender State Bank of India rose 1%, while ICICI Bank gained 1.6%.
India’s showpiece export-driven software services companies , however, continued to lose sheen, shedding 1.31%, with market leader Tata Consultancy Services falling 1.95% and bellwether Infosys Ltd dropping 1%.
Investors shied away from the sector on concerns of a slowdown in corporate IT spending, if global economic uncertainties persist in their major markets such as the United States and Europe.
The broader 50-share NSE index closed 0.78% up at 5,040.00 points.
There were 1.5 gainers for every decliners in the broader market, where 619.3 million shares changed hands.
Shares in learning solutions provider Everonn Education slumped 20%, hitting their daily limit, after the company said its chairman Jamshed Irani resigned, following the arrest of its managing director.
At 4:00pm, the FTSEurofirst 300 index of top European shares was down more than 2%.
World stocks, as measured by the MSCI world equity index , fell 0.78% .
STOCKS
Educomp Solutions fell 3.72%, after the education services provider said it has deferred a proposal to raise up to $250 million through a share sale due to poor market conditions.
Jindal Steel & Power rose 0.82%, after Goldman Sachs reinstated ratings on the company at “buy” and added it to its conviction buy list on attractive valuations and strong earnings growth trajectory.
State-run National Aluminium Co Ltd gained 2.82% after it raised aluminium prices by Rs 2,000 per tonne ($43.6) across all products.
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First Published: Fri, Sep 02 2011. 05 09 PM IST
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