Business | Markets
Indian shares rise as investors pick cheap stocks
Indian shares rebounded more than one per cent on Friday as investors picked up beaten down stocks after a sharp fall in the previous session, but higher oil prices and accelerating inflation kept the trade choppy.
- Reuters
- Published: 23:51 August 22, 2008
New Delhi: Indian shares rebounded more than one per cent yesterday as investors picked up beaten down stocks after a sharp fall in the previous session, but higher oil prices and accelerating inflation kept the trade choppy.
Reliance Industries
However, the market fell for a second week in a row, losing 2.2 per cent, and traders said shares would be volatile next week ahead of monthly derivatives expiry, with the price of oil a key factor that will set the trend, traders said.
"You can attribute today's move to some value buying and some short-covering after the sharp fall we saw," said Dipak Acharya, a fund manager at BoB Asset Management. "But the volatility will continue."
The 30-share BSE index rose 1.11 per cent , or 157.76 points, to 14,401.49, with 24 components gaining, after falling as much as 0.8 per cent during trade.
The benchmark, which fell on Thursday to its lowest close since July 29, has lost about 29 per cent so far this year, with foreign funds net sellers of more than $7 billion of stocks.
Vinod Bansal, director at Ficuswealth, said investors were not buying in a "big way" as higher oil prices and inflation were concerns.
Crude prices have jumped 6.5 per cent this week on escalating tensions between the US and Russia. The surge knocked the dollar and dragged other Asian markets to a two-year low yesterday.
Data released after market hours on Thursday showed India's annual inflation in early August at 12.63 per cent , the highest since annual numbers in the current series became available in 1995, and analysts said the rate could top 14 per cent .
"Inflation will show a rising trend for the next four to six weeks, but after that you will see it flattening and softening," said D.D. Sharma, senior vice president at Anand Rathi Securities.
Reliance gains
Reliance Industries, which has more than 16 per cent weight in the BSE index, rose 1.5 per cent to Rs2,245.65 after media reports said Anil Ambani, the estranged younger brother of Reliance Chairman Mukesh Ambani, was ready for peace talks.
"Any settlement out of the court is always better and good news for investors," Sharma said, referring to a legal battle that Reliance has been fighting with a firm controlled by Anil over gas distribution.
Shares in Tata Motors rose 1.8 per cent to Rs425.60 after its chairman said the automaker would be ready to launch Nano, the world's cheapest car, by October. The firm is prepared to move a plant to make the Nano from its eastern Indian site if violent protests continued.
The 50-share NSE index gained 1.02 per cent to 4,327.45.
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