Business | Markets
Rally in Indian shares runs out of steam
Indian shares settled for a modest gain yesterday after an early rally ran out of steam, following a weak opening in Europe and as oil prices nudged higher from a steep fall.
- Reuters
- Published: 23:12 August 25, 2008
Mumbai: Indian shares settled for a modest gain yesterday after an early rally ran out of steam, following a weak opening in Europe and as oil prices nudged higher from a steep fall.
Volume was light as investors were wary of foreign funds that have been heavy sellers this year, while a slowing domestic economy and high interest rates gave little comfort.
The 30-share BSE index ended up 0.34 per cent, or 48.86 points, at 14,450.35, with 16 components gaining, after rising as much as 1.9 per cent in early trade.
Financial stocks led the index up after a 5.4 per cent slump in oil prices on Friday eased concerns about inflation and higher interest rates, but investors were unconvinced the worst was behind them.
ICICI Bank rose 1.8 per cent to Rs655.85, while top mortgage firm Housing Development Finance Corp climbed 3.6 per cent to Rs2,363.40. The sector index advanced 1.4 per cent.
Top listed firm Reliance Industries, which enjoys the maximum weightage in the index, dropped 0.65 per cent to Rs2,230.95 on foreign fund selling, traders said.
"Besides overseas markets and crude there was nothing visble for investors. While firm Asian markets helped, a weak Europe capped the gains," Sandeep Neema, a fund manager at JM Financial Mutual Fund, said.
European shares fell early, giving up some gains from the previous session as volumes were hurt by a UK stock market holiday and as energy stocks declined. Oil, India's biggest import, nudged up more than $1 to above $115 a barrel as traders saw opportunities after prices dived 5.4 per cent on Friday in the biggest one-day fall since December 27, 2004. It is 22 per cent below its peak struck in mid-July.
Traders said the market lacked direction because of an uncertain outlook.
"A decisive move is unlikely as it awaits the cessation of foreign fund selling and the return of big ticket investors," Rajesh Jain, chief executive at Pranav Securities, said.
The BSE index is down almost 29 per cent this year, with foreign funds dumping more than $7 billion of stocks in 2008.
Export-focused technology stocks firmed as the dollar climbed against some currencies overseas and pushed the rupee down.
Infosys Technologies rose 0.5 per cent to Rs1,703.05 and Satyam Computer Services climbed 1.8 per cent to Rs393.30.
Ranbaxy Laboratories fell 2.1 per cent to Rs512.10 on market talk the Indian government may re-examine Japanese drugmaker Daiichi Sankyo purchase of a majority stake in a deal worth up to $5.6 billion.
The 50-share NSE index rose 0.18 per cent to 4,335.35.
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