Business | Markets
Indian shares rise slightly to end at seven-week high
Indian shares rose 0.3 per cent yesterday to their highest close in about seven weeks, but trade was choppy on weaker world markets and ahead of data expected to show inflation topped 12 per cent in late July.
- Reuters
- Published: 20:59 August 7, 2008
Bangalore: Indian shares rose 0.3 per cent yesterday to their highest close in about seven weeks, but trade was choppy on weaker world markets and ahead of data expected to show inflation topped 12 per cent in late July.
Traders said profit-taking by wary investors after the market rose more than three per cent in the previous two days kept a lid on the rise.
Financial stocks extended their rally on hopes a drop in oil prices to below $120 a barrel from a record above $147 in mid-July will ease the pressure on inflation, help bring down rates and spur consumer demand.
Mortgage lender Housing development Finance Corp rose 3.4 per cent to Rs2,476.60 and HDFC Bank ended three per cent higher at Rs1,253.70. The two stocks are up about three per cent and 13 per cent respectively so far this week.
"Oil prices are going to be the biggest event for us in the next few days," said Gajendra Nagpal, chief executive of Unicon Financial. "The markets will be in a wait-and-watch mode."
The main 30-share BSE index ended up 0.29 per cent, or 43.71 points, at 15,117.25, its highest close since June 18. The index rose as much as 1.4 per cent and fell 0.5 per cent during the day.
Nineteen of its components gained. Brokerage India Infoline said in a report though volumes had risen over last few trading sessions there was lack of conviction among the participants at higher levels.
After the market closed, the Business Standard newspaper said on its website that annual inflation was seen at 12.1 per cent in the week ended July 26 without citing any sources, higher than a Reuters poll forecast of 12.02 per cent. It would be the highest since data under the current series became available in 1995. Inflation has more than doubled since late February mainly on soaring prices of oil and other commodities, prompting the central bank to tighten monetary policy aggressively.
Oil, India's biggest import, was trading above $119 a barrel yesterday after dipping to three-month lows under $118 the previous day.
Inflation is expected to fall to single digits by the end of the fiscal year in March, Montek Singh Ahluwalia, deputy chairman of India's Planning Commission, said.
The BSE index is down more than 25 per cent in 2008. Shares in automobiles such as Tata Motors rose 4.1 per cent to Rs444.20, top carmaker Maruti Suzuki added 2.4 per cent to Rs668.55 and Mahindra & Mahindra gained 2.5 per cent to Rs575.95.
Bharti Airtel dropped 2.3 per cent to Rs850.15, as investors took gains in the stock that had risen about seven per cent in the previous two days.
The broader 50-share NSE index rose 0.14 per cent to 4,523.85.
Karachi's 100-share index ended up 0.29 per cent at 9,707.29
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