Markets hit 31-month high 4th day; banks up

Markets hit 31-month high 4th day; banks up

Bangalore: Indian shares powered to 31-month highs for the fourth day on Thursday, with investor confidence upbeat on rising foreign portfolio inflows and easing concerns about Europe’s debt troubles.

Banking shares led the gains as fund managers bet the sector would benefit from a booming domestic economy, which is expected to expand 8.5% in the current year to March.

Traders said they expected profit-taking to kick in ahead of a three-day weekend. The market is closed on Friday for a local holiday.

By 11:54am, the 30-share BSE index was trading up 0.4% at 18,741.46, with half its components rising. It had hit 18,797.58 early, its highest since February 2008.

“There will be profit-taking at these levels," said Neeraj Dewan, director at Quantum Securities. “This is the last leg of a short-term rally. The dips should be used to buy."

State Bank of India and ICICI Bank, the country’s top two lenders, were both up 1.4% while HDFC Bank rose 2.2%.

Automakers were in demand after an industry body said car sales rose by a third to a record high in August. Tata Motors rose 0.5%, while Maruti Suzuki and Mahindra & Mahindra firmed 0.7% and 1.4% respectively.

The BSE index has risen more than 7% so far in 2010, helped by foreign portfolio investments of over $13 billion.

In the broader market, gainers outnumbered losers in a ratio of 1.8:1 on volume of 201.5 million shares.

The 50-share NSE index was up 0.3% at 5,625.30.

Ambareesh Baliga, vice president of Karvy Stock Broking, said the market was getting overvalued and the NSE index could face resistance 5,650.

Elsewhere the MSCI’s measure of Asian markets other than Japan was up 0.7% by 0631 GMT, while Japan’s Nikkei rose 0.8%.


Hindustan Unilever was trading up 1.5% on a report in the DNA newspaper the company had hiked prices of detergents.

Port operator and developer Gujarat Pipavav Port Ltd, which listed at a premium of 22% to its issue price of Rs46, was trading at Rs53.30.

Vindhya Telelink was up by 10% at Rs437.65 after the Economic Times reported the company, in collaboration with Ericsson Cables, was set to bag a Rs7,582 crore optic fibre network contract from state-run BSNL.