Stocks rise 1.45% on global cues

Stocks rise 1.45% on global cues

Mumbai: Shares climbed 1.45% on Thursday and helped log their first weekly gain in four, as world equities rose on hopes for a rescue package for debt-laden Greece, calming investor jitters.

Energy major Reliance Industries, which has the heaviest weight in the main index, and No. 2 lender ICICI Bank led the rise, with some funds building positions ahead of three-day weekend due to a market holiday on Friday.

Neeraj Dewan, director of Quantum Securities, said some foreign funds were among the buyers after heavy selling in recent weeks.

“It is not a reversal of recent trend. It is just some respite on hopes of bailout for Greece and as global cues have been good," he said.

World stocks hit a one-week high as investors looked to European Union leaders to lay the foundations for a financial rescue of Greece at a summit in Brussels.

Reliance Industries rose nearly 3% to Rs1,013.95.

ICICI Bank firmed 3.2% to Rs826.30, a day after UBS upgraded the stock to buy from neutral citing improving profitability, slowing bad debts and inexpensive valuation.

State-run Oil & Natural Gas Corp firmed 1.1% to Rs1,100.20 after it jointly won a project along with several other companies in Venezuela’s Carabobo oil auction.

Economy has been picking up steam and growth is expected to range between 7.2 and 7.75% in the fiscal year ending March, the world’s second-fastest pace among major economies after China.

Commerce and industry minister Anand Sharma said exports grew an annual 11.5% in January, while December industrial output growth was seen in double digits.

The industrial output is due on Friday, and a Reuters poll has forecast a rise of 12%.

Yet the stock market had been under pressure from heavy foreign selling, caused by the problems in Europe. A rise in world equities could stem the outflow and revive foreign buying, traders said.

The BSE 30-share index Sensex firmed 230.42 points to 16,152.59, taking gains in the week to 2.3%. Only two of its components closed in the red.

However, the benchmark is down 7.5% in 2010 as foreign investors pulled out $2.2 billion over last 15 sessions.

In 2009, the index had risen 81% on foreign inflows of $17.5 billion.

Tejas Doshi, head of research at Sushil Finance, said the market would be rangebound until the national budget on 26 February.

“The government will look at exiting the stimulus package and as well as manage growth," he said. “It’s tricky and we’ll have to see how they manage that."

Divestment, freeing controls on fuel pricing and implementation of a goods and services tax were other key issues, he said.

Export-driven software companies rose on good sector outlook, dealers said.

Sector leader Tata Consultancy Services gained 1.4% to Rs742.50. A senior company official said on Wednesday it would hire 30,000 staff in 2010/11 on hopes of increase in demand.

Infosys Technologies and Wipro rose 1.1% and 1.2% respectively.

In the broader market, gainers outpaced losers in a ratio of 1.4:1 on volume of 354 million shares, less than last week’s daily average of 394 million shares.

The NSE 50-share index Nifty rose 1.5% to 4,826.85.