Markets rise 2%; banks, techs rebound

Markets rise 2%; banks, techs rebound

Traders said there was hectic short-covering in financial and export-driven software services companies that had been beaten down during a four-week market slide that had pulled the main index to its lowest close in more than two years last week.

Top lender State Bank of India was up 3.07%, while rivals ICICI Bank and HDFC added 3.3% and 1.3%, respectively.

Leading software services exporter Tata Consultancy Services rose 2.3%, Infosys firmed 1% and Wipro was up 1.4%.

By 12:04pm, the main 30-share BSE index was up 1.86% at 15,985.78, after rising more than 2%. All but two of its components gained.

The rise was underpinned by gains in bourses across Asia, which was helped by hopes Europe will come up with some concrete steps this week towards activating a crucial euro zone bail-out fund and reports that the International Monetary Fund is considering helping Italy.

Traders said the local market, which is down 23% in the year to date, was oversold and the positive trend elsewhere was further supported by domestic factors such as last week’s government decision to allow global supermarket giants such as Wal-Mart Stores Inc and Tesco to enter India with a 51% stake.

“The FDI ruling by the government has gone down very well with the international community," said Gajendra Nagpal, chief executive of Unicon Financial Intermediaries. “This will reinforce the fact that policy initiatives which were lacking will start to come back."

The opening up of the retail sector was the biggest reform in years by the ruling coalition.

Property developer DLF, which could benefit from demand for malls as foreign investment in multi-brand retail picks up, rose more than 3% adding to gains of nearly 5% over two sessions.

Retail stocks such as Pantaloon Retail was trading down 4.9% after soaring more than 30% over two sessions. Shoppers Stop and Trent were also down on profit-taking.

Axis Bank traded up 2% after the private-sector lender said it was monitoring exposure to infrastructure projects and was choosy about large projects. Energy major Reliance Industries, which has the heaviest weight on the main index, rose 2%.

Suzlon Energy rose more than 4% after it signed a contract for a 75 megawatt power project worth 470 crore.

The 50-share NSE index was up 1.87% at 4,798.2. In the broader market, there were 4.7 gainers for every loser on volume of about 166.5 million shares.

The MSCI’s measure of Asian markets other than Japan was up 2.28%.


Madhucon Projects jumped nearly 7% after the company said it had won a contract worth 422 crore.

Steel Authority of India rose 4% after the Financial Chronicle newspaper reported the company was in talks with two or three possible targets in New Zealand and Australia to buy coking coal assets.