Markets extend gains to more than 1%

Markets extend gains to more than 1%

Mumbai: Indian shares extended gains to more than 1% on Wednesday afternoon, following two sessions of decline, as a solid start in European markets lifted investor confidence.

At 12:45am, the 30-share BSE index was up 1% at 16,784.02 points, with 24 stocks gaining, after rising to as high as 16,793.79 earlier. The 50-share NSE index was up 1.1% at 5,042.85.

Shares nudged 0.2% higher in the morning, after two sessions of decline, but dealers were sceptical about the outlook as euro zone’s debt worries continued to bother investors.

Top mobile operator Bharti Airtel led the gainers, climbing as much as 6.7%, after it closed its $9 billion acquisition of African operations from Kuwait’s Zain in a deal that makes the Indian firm the world’s fifth biggest cellphone company by subscribers.

Energy giant Reliance, which has the highest weight on the main index, rose 1.1% after sliding 3.4% over three sessions.

By 11:18am, the 30-share BSE index was trading up 0.21% at 16,652.03, with 17 of its components gaining. The benchmark had lost 2.9% in the previous two sessions. The 50-share NSE index was up 0.5% at 5,010.75.

“It is just a technical bounceback. But there is no strength in the market yet," said Surekha Joshi, senior equity dealer for institutional equities at SPA Securities.

“It is unlikely that we can hold on to these gains as worries in Europe deter any concrete buying," she added.

Foreign funds have been sellers for three of the first five trading sessions this month, pulling out around $9 million. In May, they had dumped shares worth $2 billion and pushed the main index down 3.5%.

Bharti was trading 4.9% up at Rs270.50 after rising as high as Rs274.95. It had fallen 3.8% in the previous session.

State-run energy firms were trading higher on market talk a ministerial panel for discussing fuel price reforms could meet very soon.

Explorer Oil & Natural Gas Corp rose 2.5% while state-run oil marketing companies Bharat Petroleum Corp, Hindustan Petroleum Corp and Indian Oil Corp gained between 2.7% and 3.3%.

Shares in the companies had fallen on Tuesday, a day after the government held off the fuel decision after two powerful ministers stayed away from a ministerial panel meeting, signalling opposition to the move on fears of voter backlash ahead of local polls over the next year.

Banks advanced on optimism that credit growth will pick up as Asia’s third-largest economy expands.

India could maintain an 8.5% growth in 2010/11 despite the euro zone problems, provided there is a normal summer monsoon, finance minister Pranab Mukherjee said on Tuesday.

Top private lenders ICICI Bank and HDFC Bank rose 1% and 0.6% respectively. State Bank of India edged 0.3% higher.

In the broader market, gainer were nearly double the number of losers on volume of 105 million shares.