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BSE Sensex gains 1.7 pct; Reliance Comm rallies
June 3, 2010 / 10:21 AM / 8 years ago

BSE Sensex gains 1.7 pct; Reliance Comm rallies

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.

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

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.


* FCS Software on 15.4 million shares

* Reliance Communications on 8.2 million shares

* IFCI on 7.8 million shares


* 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.

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