Noon: Sensex up 0.8% on foreign funds

Noon: Sensex up 0.8% on foreign funds

Mumbai: Indian shares rose to fresh 16-month highs on Tuesday as high liquidity and hopes of strong quarterly earnings saw the market extend last week’s gains as trade resumed after a holiday.

Bharti Airtel declined 2.2% to Rs432.75 after a report it had offered sweeteners for its proposed tie-up with South Africa’s MTN ahead of a 30 September deadline for the deal.

Largest-listed firm Reliance Industries, which has the biggest weighting on the main index, was up 0.9% at Rs2,117.5 rupees after a report it was looking to buy some or all of bankrupt petrochemicals maker LyondellBasell.

The company raised around $600 million through a share sale last week, which analysts had said could help fund acquisitions.

At 12:38pn, 30-share BSE Sensex was 16847.15 up by 105.85 points and the 50-share NSE Nifty was at 5002.50 up by 26.45 points.

“The gush of money is so much that the market does not seem to be taking a pause," said Gajendra Nagpal, CEO of Unicon Financial pointing to the huge foreign fund inflows.

Foreign funds have been net buyers of $1.5 billion of shares in September, and their net buying of nearly $10 billion in 2009 has been a key driver of the market’s 75% rise.

“Over the last two, three days, we were all expecting that market might not fall significantly, but it may at least take a breather. But that didn’t happen," added Nagpal.

IT companies gained on hopes that the worst may be over for most developed economies, which are the major markets for these companies.

Top software exporter Tata Consultancy rose 1.2% to Rs590.75 and second-ranked Infosys Technologies gained 1.5% to Rs2,399.30.

Sterlite Industries fell 2.3% to Rs744.20 after it said it would release Grupo Mexico SAB de CV from a potential legal liability of nearly $8 billion if the Indian miner won control of bankrupt U.S. copper miner Asarco LLC.

In the broader market, there were more than two gainers for each share that lost ground, on volume of 225 million shares.

The MSCI’s measure of other Asian markets was up 0.7%. Japanese markets are closed until Thursday for public holidays.