BSE Sensex gains 1.7 pct; Reliance Comm rallies

MUMBAI Thu Jun 3, 2010 5:12pm IST

People walk past the Bombay Stock Exchange (BSE) building in Mumbai January 9, 2009. REUTERS/Punit Paranjpe/Files

People walk past the Bombay Stock Exchange (BSE) building in Mumbai January 9, 2009.

Credit: Reuters/Punit Paranjpe/Files

Related Topics

MUMBAI (Reuters) - The BSE Sensex rose 1.7 percent on Thursday to their best close in three weeks as solid U.S. home sales data rekindled hopes the global economic recovery was on track and boosted stock markets worldwide.

Energy major Reliance Industries, engineering and construction firm Larsen and Toubro and No. 2 software-services firm Infosys Technologies led the main index higher, its second consecutive rise.

No. 2 telecoms firm Reliance Communications rose 6.4 percent to 164.45 rupees, after the Economic Times newspaper said the Anil Ambani-controlled firm is considering a merger with South Africa's MTN or roping in a strategic foreign investor to raise funds.

More than 8 million shares of the company traded on Thursday, compared with their 30-day average trading volume of 1.5 million. On Wednesday, the shares had jumped 11 percent on hefty volume.

Abu Dhabi's Etisalat said on Wednesday it was looking to buy a stake in an Indian mobile operator, but did not disclose any names. A newspaper had reported the company was in talks with cash-hungry Reliance Communications for a $3.8 billion deal.

"Stocks are attractive at these levels, so liquidity has started flowing in," Avinash Gupta, assistant vice president of research at Bonanza Portfolio, said.

But he cautioned that debt problems in the euro zone and the risk of monetary policy tightening due to high domestic inflation would keep markets from rising significantly in coming weeks.

The 30-share BSE index ended up 1.68 percent, or 280.49 points, at 17,022.33, its best close since May 13, and the best single-day percentage gain since May 26.

All stocks advanced in the main index, which rose nearly 2 percent during trade.

The benchmark had slid 4 percent this year through Wednesday, having posted its first monthly decline since January in May as investors pared their exposure to risky assets in the wake of Europe's sovereign debt crisis.

"Though we cannot say that the entire scenario has changed until the euro zone debt crisis has been resolved, funds which had earlier booked profits are now re-entering the market as they think the prices are cheap," Alex Mathews, head of research at Geojit BNP Paribas Financial Services, said.

"They are being opportunistic and may continue to buy into the market in the short term," he said.

On Wednesday, surprisingly strong U.S. housing data for April drove optimism about the world's largest economy, boosted stocks overseas and drove up oil prices. The stock rally also eased concerns that Europe's debt woes could restrain a fragile economic recovery.

On Thursday, Reliance Industries, India's largest-listed firm with the most weight in the main index, rose 1.9 percent to 1,031.15 rupees.

Larsen and Toubro gained 1.9 percent to 1,660.70 rupees, while Infosys Technologies climbed 2 percent to 2,697 rupees.

In the broader market, gainers led losers by 2 to 1 on below-average volume of 322.6 million shares.

The 50-share NSE index rose 1.8 percent to 5,110.50 points.

Other Asian shares also gained, with Japan's Nikkei rising 3.2 percent, while MSCI's measure of other Asian markets climbed 2.9 percent.

At 1016 GMT, the pan-European FTSEurofirst 300 index of top shares was up 1.7 percent.

MAIN TOP 3 BY VOLUME

* FCS Software on 15.4 million shares

* Reliance Communications on 8.2 million shares

* IFCI on 7.8 million shares

STOCKS THAT MOVED

* Eclerx Services jumped 11.4 percent to 561.30 rupees after the company said late on Wednesday its board would meet on June 7 to discuss an issue of bonus shares.

* Indiabulls Securities fell 6.4 percent to 28.40 rupees as the stock went ex-dividend on Thursday. The broking firm had declared a dividend of 2 rupees per share.

* McNally Bharat Engineering rose 5 percent to 312.55 rupees on a report in the DNA Money newspaper the company is looking to expand through joint ventures, strategic partnerships and collaboration in countries such as Mongolia, South Africa and Indonesia, targeting a turnover of 70 billion rupees in the next five years.

* Electrotherm (India) climbed 12.1 percent to 327.35 rupees after the company said late on Wednesday it had completed the acquisitions of Hans Ispat Ltd and Shree Hans Papers.

For more business news on Reuters India click in.reuters.com)

FILED UNDER:

REUTERS EXCLUSIVE

Reuters Showcase

Documents' Leak

Documents' Leak

India widens oil leaks probe to defence ministry  Full Article 

Jim O’Neill Interview

Jim O’Neill Interview

'India can become world’s fifth-largest economy by decade’s end'  Full Article 

Food Security

Food Security

India will not cut multi-billion dollar food handout programme - PM  Full Article 

Ola's Expansion Drive

Ola's Expansion Drive

Taxi group Ola steps up expansion drive  Full Article 

Sahara Saga

Sahara Saga

Sahara's Grosvenor House hotel in London put up for sale   Full Article 

Suzlon Energy

Suzlon Energy

Suzlon expects to turn profitable in fiscal 2016: chairman   Full Article 

Eicher Motors Stake

Eicher Motors Stake

Volvo selling up to $300 mln worth of Eicher shares  Full Article 

Beef Trade

Beef Trade

Maharashtra clamps down on beef trade through new act  Full Article 

Budget 2015

Budget 2015

Budget announcements and reactions from the industry  Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage