Markets rise 2nd day; autos up, Bharti drops

Markets rise 2nd day; autos up, Bharti drops

Mumbai: Indian shares rose 0.4% on Thursday, climbing for a second day, as debt-laden euro zone countries began austerity measures and helped ease concerns about the Greek problems from spreading elsewhere.

Automakers led the rise on expectations for robust quarterly results for Tata Motors and Mahindra & Mahindra, and demand seen picking up in the fast expanding economy.

Still, investors were cautious after the tumultous events in Europe and watchful of foreign portfolio inflows that have been the main driver for the market.

“Our market will consolidate until the end of this month," said D.D. Sharma, senior vice-president of research at brokerage Anand Rathi. “After that if global cues are not bad, we should move higher on our fundamental strength."

Spain said on Wednesday it would slash civil service pay and cut public jobs while Portugal’s finance minister told Reuters his government had identified new austerity measures to reduce its budget deficit, offering investors some reassurances that those countries are addressing deep-rooted fiscal problems.

The 30-share BSE index closed up 0.41% or 70.06 points, at 17,265.87, after rising more than 1% at one stage. Twenty-one of its components advanced. The 50-share NSE index firmed 0.4% to 5,178.90.

The benchmark is down 1.1% so far this year on worries foreign fund investment, which has totaled nearly $6 billion since the start of January, may slacken if the global risk appetite wanes.

In 2009, the index had jumped 81% on record foreign inflows of $17.5 billion.

Mahindra & Mahindra, the country’s leading utility vehicle and tractor maker, rose 3.4%. It is slated to announce results on May 29. Tata Motors, the top truck producer that also makes cars, climbed 3.5%. It is yet to set a date for results.

Financials closed mixed. Top lender State Bank of India and private sector lender HDFC Bank fell 0.4%, while ICICI Bank added 1.2%.

Mortgage lender Housing Development Finance Corp rose 1.1%.

Food inflation snapped a two-week declining trend in late April, but the central bank is seen awaiting more cues on prices and on demand before deciding on further policy action.

Leading telecoms Bharti Airtel continued to reel under pressure following a plan to slap new fees on second-generation mobile spectrum in India, a proposal that has drawn howls of protest from carriers.

The stock shed 1.1% to Rs258.65, its lowest close in 3 years, and taking losses over three days to more than 12%. It was the fifth-most traded on the BSE, with a volume of 5.2 million shares, more than 6 times its average volume in 30 days.

Dealers said the annual monsoon would be the next trigger for the market.

The June-September rains, which are the main source of irrigation in India, is forecast to be near normal this year. In 2009, the driest spell in 37 years had hit farm output and rural income.

Export-focused software companies rose on expectations the waning euro zone concerns will boost outsourcing orders. Bellwether Infosys Technologies and sector leader Tata Consultancy Services gained nearly 1% and 0.8% respectively.

Consumer Products jumped 13.8% to Rs339.05, after Sara Lee Corp said on Wednesday it would sell its 51% stake in Godrej Sara Lee joint venture, to the Indian partner for 185 million euros.

Energy giant Reliance Industries, which has the highest weight on the Sensex, dropped 0.9% to Rs1,071.80.

In the broader market, gainers outpaced losers in a ratio of 1.5:1 on relatively lower volume of 309 million shares.

Elsewhere, the pan-European FTSEurofirst 300 rose 0.3% by 3:54pm, while the MSCI’s measure of Asian markets other than Japan firmed 1.8%.