Business | Markets
Indian shares rebound but outlook cautious
Indian shares snapped a four-day slide and rose 1.5 per cent yesterday, but traders were not convinced about the strength of the recovery because of worries about rising inflation and slowing growth.
- Reuters
- Published: 00:10 May 29, 2008
Bangalore: Indian shares snapped a four-day slide and rose 1.5 per cent yesterday, but traders were not convinced about the strength of the recovery because of worries about rising inflation and slowing growth.
Short-covering ahead of the monthly expiry of derivatives contracts and gains in European stocks underpinned the market, while US stock futures suggested a firm start on Wall Street. A drop of more than $2 in oil prices also helped, traders said.
Gainers
Tobacco firm ITC rose 6.2 per cent to Rs222.05, its highest close in nearly a week. Credit Suisse raised its target price on ITC, saying on Tuesday the firm was well-positioned to grow in a slowdown.
Shares in Reliance Industries, India's top listed company, ended 1.2 per cent higher at Rs2,521.80 on renewed institutional buying after the stock fell 6.5 per cent in the last four days.
Traders said sentiment was helped after the finance ministry denied media reports it was considering a cess or levy on income and corporate tax to compensate oil refiners for selling fuel at state-set low prices.
The main 30-share BSE index ended up 1.53 per cent, or 249.78 points, at 16,525.37, after having moved between losses and gains earlier, with 23 components gaining.
"It's going to be just a two-day wonder before the settlement and things will be back to square one from Friday," said Arun Kejriwal, a strategist at research firm KRIS. "No major negative news helped sentiment, but the worst is surely not over."
The trend was negative in the broader market with 1,360 losers outpacing 1,305 gainers on volume of 325 million shares.
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