Business | Markets
Indian shares end seven-day decline to climb over 5%
Indian shares snapped a seven-day slide and climbed 5.5 per cent on Friday, after large domestic funds bought in late trade triggering short covering ahead of the weekend.
- Reuters
- Published: 23:30 November 21, 2008
Mumbai: Indian shares snapped a seven-day slide and climbed 5.5 per cent on Friday, after large domestic funds bought in late trade triggering short covering ahead of the weekend.
Expectations the central bank will cut interest rates to support slowing growth underpinned the market that had tumbled a fifth over the previous seven days.
Traders said the fund buying came in during the last 90 minutes after the main index slipped into negative. Index heavyweight Reliance Industries, financials and outsourcers led the bounce.
"People have been expecting a rate cut in the next couple of days and that is visible in the gains made by SBI and HDFC. If it doesn't come, there may be renewed selling in banking stocks," said Neeraj Dewan, director at Quantum Securities.
State Bank of India rose 8.3 per cent to Rs1,183.15, while rival ICICI Bank gained 4.7 per cent to Rs335.55. Mortgage lender Housing Development Finance Corp rose 8.5 per cent to Rs1,399.30.
The bank sector index rose 4.6 per cent.
The central bank has cut its main lending rate by 150 basis points to 7.5 per cent and banks' cash reserve requirement by 350 basis points to 5.5 per cent in the past two months and the authorities have said more steps were on the anvil.
The 30-share BSE index rose 5.49 per cent, or 464.20 points, to 8,915.21, its first gain in eight sessions. It lost five per cent over the week, falling for a second week in a row, and is down 56 per cent this year.
All but three of the index components were higher, but in the broader market losers edged out gainers 1,299 to 1,185. Volume was a moderate 276 million shares after being light in the past two days.
The 50-share NSE index gained 5.5 per cent to 2,693.45.
The outlook for the market remains downbeat with the global economic gloom and a slowing domestic growth hastening foreign fund withdrawals from emerging markets such as India, traders said.
Foreigners have pulled out a net $13.45 billion from Indian shares this year, with the outflow so far in November at $624.9 million.
Export-led software firms gained on hopes a sliding rupee would help their earnings.
Tata Consultancy Services rose 7.9 per cent to Rs506.55, Infosys Technologies gained 5.1 per cent to Rs1,184.75 and Wipro was up 4.6 per cent to Rs229.80.
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