Home >Money >Markets end 1% up on strong global cues

Markets end 1% up on strong global cues

Markets end 1% up on strong global cues

Mumbai: Indian shares shrugged off a shaky start and rose 1.4% on Thursday, snapping a three-day fall, as investors covered short positions on the final day of monthly derivatives and strong overseas markets provided support.

Sentiment across Asia and Europe was lifted after China’s central bank pledged to maintain loose monetary policy to support economic recovery and ensure sustainable credit growth without resorting to heavy-handed quotas to rein in a surge in lending.

Fears that China may seek to regulate credit growth had dragged down Chinese stocks 5% on Wednesday and weighed on markets across the globe.

Even though possible regulatory action in China was unlikely to affect India directly, investors used it as an excuse to take profits on a recent rally after some results from top firms disappointed during the week, traders said.

However, on Thursday, government-run State Bank of India reported a better-than-expected 42% jump in quarterly profit, boosting its shares 4% to Rs1,722.80.

The news also helped private-sector lender ICICI Bank, which rose 3.1% to Rs755.35, while rival HDFC Bank added 3% to Rs1,459.80.

Other major gainers included top mortgage lender Housing Development Finance Corp, which climbed 4.3% to Rs2,464.75, while consumer-goods firm Hindustan Unilever advanced 5.2% to Rs281.85 after falling 10.3% over the previous two sessions.

“The futures and options expiry helped the market today. Overseas markets were up too," R K Gupta, managing director at Taurus Mutual Fund, said.

“Also, some company results yesterday and today have come in above expectations, giving a fresh confidence to investors."

The 30-share BSE index ended up 1.41% or 214.50 points, at 15,387.96, with 22 stocks advancing, after falling as much as 0.7% during trade. The 50-share NSE index rose 1.3% to 4,571.45.

Upbeat earnings reports in the past few weeks have driven global stock markets higher and prompted investors to take on more risk in their portfolios as they grow increasingly confident that the world economy is on the path to recovery.

However, India’s benchmark is little changed this week following its 14% rise over the previous two weeks as disappointing results from Reliance Industries, Hindustan Unilever, Sun Pharmaceutical and Tata Steel weakened the market momentum seen since mid-July.

Sun Pharmaceutical fell 3.6% to Rs1,145.25, while Reliance Industries, which has the most weight in the main index, eased 1.4% to Rs1,899.90 on Thursday.

In the broader market, gainers led losers 1,521 to 1,175 on relatively light volume of 392.7 million shares.

India’s wholesale price index remained negative in annual terms in mid-July but analysts said inflation would soon return and the central bank was right to leave interest rates steady at a policy review this week.

Most Asian markets recovered from lows on Thursday, with Japan’s Nikkei rising 0.5%, while MSCI’s measure of other Asian markets was up 0.9%.

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