Markets gain over 3%; recover from 6 session fall

Markets gain over 3%; recover from 6 session fall

Mumbai: Indian shares rebounded 3.3% on Wednesday, their biggest rise in more than three and a half months, supported by the government’s assurance fiscal stimulus would be maintained and a world stocks rally.

Finance minister Pranab Mukherjee said late on Tuesday the government will maintain its fiscal stimulus due to uncertainty arising from a poor monsoon and the global outlook, as data showed the summer crop could post a bigger-than-expected fall.

Energy giant Reliance Industries rose 5.5% to Rs1,920.65, erasing most of its 5.7% fall on Tuesday.

A legal dispute between billionaire Mukesh Ambani-led Reliance Industries and Reliance Natural Resources, controlled by younger brother Anil, was disrupted on Wednesday when a judge withdrew from a Supreme Court hearing, citing potential conflict of interest.

The 30-share BSE index closed up 3.29%, or 507.19 points, at 15,912.13, after falling 8.4% over the previous six sessions. Twenty-seven of its components gained. The 50-share NSE index closed 3.2% higher at at 4,710.80.

Ved Prakash Chaturvedi, managing director of Tata Asset Management, said the market’s slide over the past week was exaggerated was now responding to positive cues from overseas.

“Investors have entered at lower levels believing in the fundamental strength of our market," Deven Choksey, managing director and CEO of K.R. Choksey Shares.

Foreigners have moved more than $14 billion into Indian stocks since the start of January, helping the benchmark rise nearly 65% in 2009.

But, the index is down 9% from 17,493.17, its highest in 2009 which was set on 17 October.

Market participants are not sure of the direction.

“Whether the rise we saw today will sustain in the near term, is a question mark," Choksey said.

Software services companies rose on expectations of better growth outlook.

Second-largest software services exporter Infosys Technologies climbed 4.7% to Rs2,239.60 while leader Tata Consultancy rose 3% to Rs625.85.

Infosys, is in a “sweet spot of growth", with banking financial services and insurance vertical leading the charge, JM Financial analyst Gopal Agarwal said in a note.

Engineering and construction firm Jaiprakash Associates rose 9.4% to Rs212.65 after it said cement shipments in October rose 41.3% from a year earlier to 0.816 million tonnes.

In the broader market, gainers outnumbered losers in the ratio of 1.9:1.