Sensex up 0.4%; NMDC, Cairn rise

Sensex up 0.4%; NMDC, Cairn rise

Mumbai: Indian shares were trading up 0.4% on Monday, with a sharp rise in global appetite for domestic stocks boosting investor confidence.

Energy major Reliance Industries, which has been a laggard this year, led the gains rallying 1.6% as it sought to catch up with the broader market.

Cairn India rose 2.6% after the Business Standard newspaper reported India-focused miner Vedanta Resources, which is bidding for the energy explorer, was likely to raise the open offer price for minority shareholders.

NMDC was up 1.4% after the Economic Times reported China’s Sinochem has approached the Indian state-run miner for a joint bid to buy Canada’s Potash Corp.

By 11:04 am (0534 GMT), the 30-share BSE index was up 0.38% at 20,326.97 points, with 24 of its components advancing. It had risen as much as 1% early and is only around 850 points away from its record high.

Kunal Sukhani, manager of institutional equities at Asian Markets Securities, said rising foreign demand and firm regional markets were keeping the undertone upbeat.

Foreigners had pumped $2.7 billion into Indian equities in the week ended 8 October 8, and the country was the preferred destination among its peers, data from Nomura showed.

Portfolio investments in equities by foreigners have exceeded $21 billion so far in 2010, and the main stock index has risen 16.4%.

Neeraj Dewan, director of Quantum Securities, said the market could pause after an initial public offering by Coal India Ltd, the world’s largest coal miner that is aiming to raise up to $3 billion around mid-October.

“A lot will also depend on how quarterly earnings shape up," he said. Infosys Technologies, the country’s No. 2 outsourcer, is set to kick off the earnings parade on Friday.

Metal producers were firm after base metal futures rallied in Shanghai buoyed by expectations of more stimulus from the US Federal Reserve.

Tata Steel, the world’s seventh-largest producer of the alloy, was up 1.9%, while Sterlite Industries and Hindalco climbed 1.6% and 1.4% respectively.

In the broader market, gainers were nearly thrice the number of losers on volume of 163 million shares.

The 50-share NSE index was up 0.4% at 6,128.25.

Elsewhere, the MSCI’s measure of Asian markets other than Japan was up 0.5% , while Japanese markets were closed for a public holiday.