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Business News/ Money / Personal-finance/  Markets rise for 3rd day; edge 0.1% higher
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Markets rise for 3rd day; edge 0.1% higher

Markets rise for 3rd day; edge 0.1% higher

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Mumbai: Indian shares retreated from a fresh 31-month high to end Wednesday 0.1% higher, supported by continued foreign fund interest in the country’s long-term growth story.

However, trade was choppy as world equities fell on fresh concerns about the health of European banking system.

The 30-share BSE index rose 0.12% or 21.65 points at 18,666.71, with 18 of its components closing in the green. It rose as much as 18,721.21 points earlier, its highest level since February 2008.

“Liquidity will support the market in the near term. But, it cannot always continue," said Ambareesh Baliga, vice-president of Karvy Stock Broking. “If things deteriorate more in Europe, world markets could be impacted and India is no exception."

Foreign funds have pumped in $6.6 billon in Indian equities in 2010, including the primary market papers.

The benchmark has added 6.9% so far in 2010. It had rallied 81% in 2009, on the back of record foreign fund inflows of $17.5 billion.

Telecom operators Bharti Airtel, Reliance Communications and Idea Cellular <rose between 1% and 2.6%, on expectations of more upside from 3G revenues over the long term, dealers said.

Cigarette-to-hotel business ITC dropped 1.2% as traders logged gains after the stocks’ outperformance year to date. ITC is still up more than 30% so far in 2010.

Energy giant Reliance Industries dropped 0.2%, on lack of any near-term positive triggers, dealers said.

Sun Pharmaceutical Industries rallied 2.1% after the Supreme Court of Israel ruled in favour of the drugmaker and paved the way for closing of its offer for Taro.

Financials mostly dropped on expectations the central bank will maintain its hawkish stance and raise rates at its policy review on 16 September.

The Reserve Bank of India may not be ready to tone down its hawkish monetary policy just yet as it awaits more data to see whether signs of cooling growth are an aberration or a trend, three central bank sources said.

Leading private-sector lenders ICICI Bank and HDFC Bank shed 1% and 0.7% respectively. Mortgage lender Housing Development Finance Corp dropped 0.4%.

State-run State Bank of India bucked the trend and gained 2.1%, as its chairman said the country’s largest lender would like to merge associate banks as soon as possible.

The Economic Times report that the US state of Ohio had banned outsourcing of government IT and back-office projects to offshore locations such as India, raised fears of similar moves by other American states.

“It is sentimentally negative; but, IT companies get most of their contracts from the private sector and share of orders from government is not very big to make an impact," said Harit Shah, research analyst at Karvy Stock Broking.

Top outsourcer Tata Consultancy Services gained 0.9%. Rivals Infosys Technologies Wipro firmed 0.6% each.

Winning shares led losing ones in a ratio of 1.2:1 on a relatively better volume of 497 million shares.

For the year to date, the benchmark BSE index has outperformed broader indexes such as and the Thomson Reuters global stock index which have shed more than 3% in the period.

The 50-share NSE index closed 0.1% higher at 5,607.85 points.

The FTSEurofirst 300 index of top European shares gained 0.4% by 4:19pm, while the MSCI’s measure of Asian markets other than Japan declined 0.6%.

STOCKS

State-run lender Rural Electrification Corp closed 2.1% higher at 350.45 rupees, after its finance head said it was seeking central bank nod to raise foreign institutional investor stake in the firm to 35% from 24%.

SpiceJet climbed 1.7% to Rs77.45 after the budget carrier said it would launch international services to Nepal and Sri Lanka in October.

Gammon Infrastructure Projects climbed 6.6% to Rs25.80 after it achieved financial closure for a loan worth 8.46 billion rupees for a highway project in eastern Indian Bihar state.

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Published: 08 Sep 2010, 04:45 PM IST
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