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Indian shares climb 1.4% as investors seek bargains

Indian shares climbed 1.4 per cent on Monday to their highest in more than a week as investors picked up beaten down stocks such as financials, but the outlook was wary as oil nudged closer to $135 a barrel.

  • Reuters
  • Published: 23:06 June 16, 2008
  • Gulf News

Mumbai: Indian shares climbed 1.4 per cent on Monday to their highest in more than a week as investors picked up beaten down stocks such as financials, but the outlook was wary as oil nudged closer to $135 a barrel.

Second-largest mobile operator Reliance Communications was among the big losers in the top-30 BSE index, amid fears a family feud could delay a multi-billion dollar tie-up with South Africa's MTN.

The stock ended 1.5 per cent down at Rs535.10 after starting up 0.5 per cent. Energy group Reliance Industries, run by Mukesh Ambani, said last week it had the right of first refusal to a controlling stake in Reliance Communications, owned by younger brother Anil Ambani.

"The market hates uncertainty and any such news would not help the stock," Jayesh Shroff, fund manager at SBI Mutual Fund, said.

Reliance Communications has been in exclusive talks with MTN since late-May about a deal that could create a top-10 global telecom firm. As part of a tie-up, Anil Ambani is likely to swap his control of Reliance Communications to become the largest shareholder in MTN.

"I see the stock subdued in the short-term at least," said Harit Shah, telecom analyst at Angel Broking. "Sentimentally, it is negative unless a clear settlement is arrived at."

Bigger rival Bharti Airtel rose 3.2 per cent to Rs839.60, its highest close since June 3, after falling 7.1 per cent in the past two weeks.

The 30-share BSE index closed up 1.36 per cent, or 206.20 points, at 15,395.82, with 23 components rising.

The benchmark had risen as much as 2.4 per cent during trade, but came off towards the close.

"There is a lack of conviction at higher levels. And crude moved up again adding to the concern," said Amitabh Chakraborty, president for equities at Religare Securities.

India imports almost 70 per cent of its oil requirements and an about 10 per cent increase in state-set fuel prices on June 4 is expected to propel inflation to double-digits, the highest in more than 13 years.

Revival

Beaten down financial stocks rose, with No. 2 lender ICICI Bank rising 4.4 per cent to Rs798.70, its highest close in more than two weeks, while smaller rival HDFC Bank rose 2.5 per cent to Rs1,151.45.

The BSE Bank index rose 2.8 per cent but is down nearly 36.5 per cent in 2008.

Export-driven software stocks were bolstered by a strengthening dollar. Bellwether Infosys Technologies, which gets more than half its revenue from the United States, rose 2.3 per cent to Rs1,907.25 and Satyam Computer Services gained 1.6 per cent to Rs488.45.

Top listed firm Reliance Industries, which has the heaviest weight in the main index, ended 0.7 per cent higher at 2,284.85 after sliding 5.5 per cent in the past two weeks.

In the broader market, 1,774 gainers led 873 losers.

The BSE index, or Sensex, had fallen 2.5 per cent last week and is down 24 per cent so far in 2008.

The 50-share NSE index ended 1.2 per cent higher at 4,572.50 points.

Currency: Rupee gives up gains

The Indian rupee gave up early gains and ended flat yesterday as investors sought to arbitrage a weaker rate for offshore non-deliverable forwards, although a solid gain in the stock market helped contain losses.

The partially convertible rupee ended at 42.945/955 per dollar, off an early high of 42.85, and a shade weaker than Friday's close of 42.94/95. It hit a 13-month low of 43.21 in late May.

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