Markets join global rally; outsourcers lead

Markets join global rally; outsourcers lead

Mumbai: Indian shares joined Asia’s rally on Monday, with software companies leading the gains, as investors took the US Federal Reserve’s discount rate hike last week as a sign the world’s largest economy was recovering.

By 9:37am, the 30-share BSE Index was up 1.26% at 16,395.62, with all of its components trading in the green. The 50-share NSE index was up 1.2% at 4,902.45.

Export-focused outsourcers gained on improving prospects in the United States, one of their largest markets, dealers said.

Infosys Technologies was up 2.1% while Tata Consultancy Services and Wipro both gained 1.5%.

Data from Nomura showed foreign funds preferred Indian equities in the Asian region in the week to 19 February.

“We rose as global markets are firm. But, I doubt if we can sustain all the gains. We should close in the positive, but not at these levels." said R. Ganesh, director of Systematix Shares.

“The reason for the bounce is short-covering. There is no urgency to buy from investors. It is like any other day," he added.

The US Federal Reserve on Thursday made its first interest rate move since December 2008, hiking an emergency lending rate it charges banks, but insisted borrowing costs would not rise for consumers or companies.

The central bank’s view of the economy has brightened in recent months as job losses eased, consumer spending strengthened and businesses stepped up purchases of equipment and software.

Ganesh expected trade to be cautious this week ahead of India’s federal budget on Friday and the expiration of monthly derivatives contracts on the National Stock Exchange on Thursday.

Reliance Industries rose 0.8% on a media report the energy major has raised its offer for US-based petrochemicals maker LyondellBasell to about $14.5 billion.

Angel Securities said the revised bid by Reliance would improved its prospects for the acquisition of the petrochemicals maker. The Mumbai-based brokerage maintained a “buy" on Reliance, with a target price of Rs1,260.

Top mobile operator Bharti Airtel gained 0.9% to Rs280.75 after a Kuwaiti newspaper reported on Sunday that telecoms firm Zain and the Indian firm are expected to sign a letter of intent for the $9 billion African assets deal this week.

Separately, the Economic Times reported Bharti Airtel has lined up $9 billion in loans from foreign and local banks for its planned acquisition.

In the broader market, gainers were nearly thrice the number of losers in volume of 40 million shares.