Business | Markets
Indian shares rise ahead of central bank review
Indian shares rose 0.52 per cent in choppy trade on Monday, led by Larsen & Toubro and Reliance Industries, as investors braced for a possible increase in official interest rates on Tuesday.
- Reuters
- Published: 00:05 July 29, 2008
New Delhi: Indian shares rose 0.52 per cent in choppy trade on Monday, led by Larsen & Toubro and Reliance Industries, as investors braced for a possible increase in official interest rates on Tuesday.
Top engineering firm Larsen & Toubro jumped 3.7 per cent after it reported a forecast-beating 33 per cent rise in net profit, while No. 2 lender ICICI Bank recovered early losses of five per cent to end one per cent up as some investors drew comfort from its higher interest income even as its net profit fell.
The Reserve Bank of India reviews monetary policy today and seven of 11 economists polled by Reuters expect it to raise its key lending rate by 25 or 50 basis points from 8.5 per cent to rein in double-digit inflation.
"I think the RBI would take more of a proactive approach, than a reactive approach to control inflation," said Jigar Shah, head of research at Kim Eng Securities India, adding an increase of more than 25 basis points would be a negative surprise for the markets.
The main stock index ended up 74.17 points at 14,349.11, with 13 of components rising.
In the broader market, there were 1,765 gainers to 850 losers on a volume of 278.4 million shares.
"Probably the market is also looking at reduced problems in the United States, relatively lower prices of oil and more importantly at economic reforms," Shah said.
Reliance rebounds
Top private firm Reliance Industries rebounded 1.5 per cent to Rs2,179.10, after a 6.9 per cent fall in the previous session due to disappointment with its June quarter results.
Merrill Lynch retained its "buy" on the stock even as it cut its per-share earnings estimates for 2008/09 by 13 per cent.
Top explorer Oil & Natural Gas rose three per cent to Rs1,012.50 ahead of its quarterly results. Later yesterday, the company posted a forecast-beating 44 per cent rise in quarterly profit from a year earlier.
Top lender State Bank of India, which had risen 3.5 per cent in the morning on better than expected results, reversed gains to end 2.1 per cent lower at Rs1,418.05.
The 50-share NSE index ended 0.47 per cent at 4,332.10.
A series of bomb blasts that killed nearly 50 people in a communally sensitive western Indian city and a southern IT hub, had little impact on the markets. Fears of more attacks saw India's major cities put on high alert on Sunday.
Elsewhere in the region, Colombo's All-share index gained 1.41 per cent to 2,403.59.
Non-ferrous metals producer Sterlite Industries closed 3.5 per cent down at Rs582.25 after it reported a marginal 0.7 per cent rise in net profit from a year earlier. Ranbaxy Laboratories rose 2.6 per cent to Rs493.75. The firm said it had launched a generic version of ulcer pill Prilosec in the United States. The company reports results today and is forecast to post an 80 per cent drop in net profit on forex losses.
Currency: Rupee weakens
The Indian rupee weakened yesterday, after having risen in early trade, as oil refiners bought dollars in the local currency market to meet month-end import commitments.
The partially convertible rupee ended at 42.55/56 per dollar, down 0.7 per cent from Friday's close of 42.26/27 and off an early high of 42.1950. It rose to 41.82 per dollar last week, its highest since May 12.
- Reuters
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