Markets up 0.5%; Reliance, banks gain

Markets up 0.5%; Reliance, banks gain

Mumbai: Indian shares were trading 0.5% higher on Thursday, tracking gains elsewhere in Asia, with Reliance Industries and banks leading the gainers.

Asian shares rebounded as worries that China’s policy tightening would slow its demand receded.

Energy giant Reliance Industries, which has the highest weight in the main index, rose 1.7% to Rs1,107, with investors awaiting more clarity over its plan to acquire bankrupt LyondellBasell.

The stock was also catching up with the gains in the broader market, having risen just 0.5% since end-September, while the main index gained 2.7%.

By 09:56am, the 30-share BSE Index was trading up 0.49% at 17,596.41, with 11 of its components gaining. The 50-share NSE index was up 0.6% at 5,264.35.

“Positive Asian markets helped us open up today," said R. Ganesh, director of Systematix Shares, a Mumbai-based brokerage firm.

“There are some issues on valuation right now. But as more earnings pour in, these should get re-adjusted," he said, adding that he expected a minor correction in the market before the federal budget on 26 February.

Investors awaited wholesale price inflation data for December, which is due by mid-day (0630 GMT), for further direction.

Wholesale prices are expected to have risen 7.31% in December from a year earlier, the median forecast in a Reuters poll of 22 economists showed, up from a rise of 4.78% in November.

Leading lenders such as State Bank of India and ICICI Bank gained 0.5% and 1.5%, ahead of the inflation data.

“Going by the China experience, it looks like their move was just a soft tightening of stimulus package and looks like investors overreacted," said Ganesh.

“Also, Indian banks are relatively stronger and better placed than other Asian banks, which make them attractive," he added.

In the broader market, gainers were four times the number of losers, while 158 million shares changed hands on the Bombay Stock Exchange.