Business | Markets
Positive sentiment helps Sensex end losing streak
Indian shares rose 0.9 per cent yesterday, snapping a five-day losing streak, with sentiment helped by a rebound in world markets on optimism that China would introduce a stimulus package to boost growth.
- Reuters
- Published: 23:43 August 20, 2008
New Delhi: Indian shares rose 0.9 per cent yesterday, snapping a five-day losing streak, with sentiment helped by a rebound in world markets on optimism that China would introduce a stimulus package to boost growth.
Top private sector firm Reliance Industries and largest mobile operator Bharti Airtel led the gains, although worries about rising inflation, slowing growth and global credit problems remained.
Most Asian stock markets edged up yesterday, recovering from a two-year low as Chinese shares soared 7.6 per cent on hopes of a stimulus package to jump-start growth, with the gains also helped by cheaper valuations.
"Today I think that was the main driver," said Jayesh Shroff, a fund manager at SBI Mutual Fund, said the Asian rebound.
"Otherwise nothing has changed really. I expect the see-saw movement to continue for sometime. Bad news from the international markets would be negative for us, and the positive trigger would be if the government steps ahead with reforms."
The 30-share main BSE index rose 0.92 per cent, or 134.50 points, to 14,678.23, with 23 components gaining as the market recovered from Tuesday's three-week closing low. The index rose as much as 1.4 per cent during trade, but is still down almost 28 per cent this year. Foreigners have been net sellers of $6.8 billion worth Indian shares this year.
Tightening policy
The central bank has tightened monetary policy aggressively to rein in inflation, which hit 12.4 per cent in early August, and higher interest rates and tighter credit availability has started hitting demand and increasing costs.
"There is no silver lining here that can take the markets further," said Jigar Shah, head of research at Kim Eng Securities India.
"It's been almost a month since the government won the trust vote and we haven't heard any announcement of major reforms, which is a big disappointment for foreign investors."
Reliance Industries gained 1 per cent to Rs2,244.15 and Bharti Airtel added 3 per cent to Rs815.25.
No 2 mobile operator Reliance Communications gained 3.8 per cent and fifth-ranked Idea Cellular, which launched its services in the Mumbai telecom zone yesterday, rose 2.8 per cent.
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