Shares rise on bargain hunting; industrial data helps

Shares rise on bargain hunting; industrial data helps

New Delhi: Shares rose 1.4% on Friday, snapping a three-session losing streak, on better-than-expected industrial output growth and bargain buys.

Energy major Reliance Industries led the gains, while top lender State Bank of India and No. 2 ICICI Bank also climbed after being beaten down for most of the week.

The BSE 30-share index Sensex closed 1.39% higher at 19,508.89 points, its best percentage daily gain in a week, with 22 of its components rising.

The index, however, ended the week 2.3% lower.

“Fundamentally, people have started liking the valuations," said Deven Choksey, managing director of brokerage K.R. Choksey, but was not convinced by Friday’s gains.

“The rise in market today is not backed by strong volumes and it is largely because of some amount of short-covering and at the same time some small buying... after the kind of onslaught we saw in the last few days."

Data showed industrial output in October grew at its fastest clip in three months, powered by demand for consumer durable goods such as cars, and analysts said it was unlikely to prompt the Reserve Bank of India (RBI) to increase interest rates when it reviews its monetary policy next week.

But markets, unnerved by regulatory crackdown on companies after corruption scandals emerged thick and fast, are expected to remain shaky as investors focus on a deepening probe into alleged corruption in 2G licences distribution.

On Thursday, New Delhi widened the probe into the country’s biggest corruption case to include decisions made during the NDA’s rule, a move that may take steam out of a campaign against the government.

“There is negative sentiment because of concerns about regulatory investigations. But I think markets will now stabilize," said K.K. Mital, head of portfolio management at Globe Capital in New Delhi.

Largest-listed Reliance Industries rose 4% to Rs1,023.70. ICICI Bank jumped 5.7% and its larger rival State Bank of India closed 1.9% higher.

In the broader market, 1,952 gainers were ahead of 1,022 losers on a relative low volume of about 341 million shares.

The broader NSE 50-share index Nifty gained 1.58%.

The pan-European FTSEurofirst 300 index of top shares was up 0.1% at 1138 GMT, while MSCI’s measure of Asian markets other than Japan was up 0.1%.