Business | Markets
China effect ignites Indian share rally
Indian shares rose 5.74 per cent on Monday as they rode a global rally after China's massive stimulus package raised hopes authorities elsewhere would follow suit to stave off a sharp economic downturn.
- Reuters
- Published: 00:11 November 11, 2008
Bangalore: Indian shares rose 5.74 per cent on Monday as they rode a global rally after China's massive stimulus package raised hopes authorities elsewhere would follow suit to stave off a sharp economic downturn.
Reliance Industries rose 7 per cent to Rs1,303.05 (Dh1,066), its biggest one-day gain since October 31, taking the gains for India's most valuable listed firm to more than 11 per cent over Friday and yesterday after it had fallen about 20 per cent in the previous two sessions.
Merrill Lynch retained its buy rating on Reliance, saying the stock's valuation was compelling and positive news flow in terms of discoveries and reserves accretion was likely to continue.
ICICI Bank rose 9.2 per cent to a one-month closing high of Rs471.10 and top lender State Bank of India added 4.2 per cent to Rs1,301.55 on expectations that interest rates would soften further, traders said.
"The valuations are too attractive for investors not to come in, but I don't see a secular run in the sense that all the bad news flow may not be over," said Jayesh Shroff, fund manager at SBI Mutual Fund.
Highest close
The 30-share BSE index ended up 571.87 points at 10,536.16, its highest close since Tuesday, with all but two of components gaining. It rose as much as 6.1 per cent during trade.
The benchmark has risen 37 per cent from a three-year low hit on October 27, although it is still down 48 per cent in 2008 to be one of the worst performers in Asia this year.
"The market is seeing some stability after collective efforts by governments and central banks to infuse more liquidity into the financial system," said K.K. Mital, head of portfolio management services at Globe Capital.
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