Midsession: Markets rise by 1% on bank gains

Midsession: Markets rise by 1% on bank gains
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First Published: Thu, May 07 2009. 12 44 PM IST
Updated: Thu, May 07 2009. 12 44 PM IST
Mumbai: Indian shares rose more than 1% on Thursday morning as investors saw some encouraging signs about the health of US banks and the state of the global economy which boosted their appetite for risk across Asia.
Leading lenders ICICI Bank and State Bank of India rode a rise in financial stocks in Asia after several reports on the capital needs for 10 of the 19 banks under the US government’s microscope ahead of the release of the government ”stress tests” on Thursday.
Energy giant Reliance Industries and Housing Development Finance Corp were among other major advancers.
By 10:52am, the 30-share BSE index .BSESN was up 1.1% at 12,082.87 points, with 22 stocks gaining. The 50-share NSE index was up 1.2% at 3,668.68 points.
The benchmark had dropped 1.5% on Wednesday, a second fall after shares had jumped more than 10% in two sessions, with some caution seen ahead of general election results next week.
“A 1% move today is nothing very surprising. The election results next week will set the stage for what direction the market moves in the near-term,” Hitesh Agrawal, head of research at Angel Broking, said.
”If the (new government’s) mandate is more fractured than expected, the correction could be severe,” he said.
Some analysts believe the market, which has jumped more than 50% from its 2009 low in early March, is overbought and trading will remain choppy with a negative bias in the near term.
But the rise in international markets on Thursday provided support for an upswing, traders said. Asian shares were higher on Thursday, with Japan’s Nikkei rising 4.1%, while MSCI’s measure of other Asian markets up 1%.
Private-sector ICICI Bank rose 1.1% to Rs546.60, while government-run State Bank of India climbed 2.1% to Rs1,352.
Reliance Industries, which has the biggest weight in the main index, advanced 1.8% to Rs1,913. Housing Development Finance Corp gained 1.8% to Rs1,780.
In the broader section, gainers outstripped losers in the ratio of more than 2.5:1 on relatively light volume of 88 million shares.
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First Published: Thu, May 07 2009. 12 44 PM IST
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