Business | Markets
Sensex gains over 9% in three-day rally
Indian shares climbed 1.96 per cent on Friday, extending gains in a three-day rally to over nine per cent, but traders were wary about the strength of the move as the risk of recession in the US still loomed large.
- Reuters
- Published: 00:32 February 16, 2008
Bangalore: Indian shares climbed 1.96 per cent on Friday, extending gains in a three-day rally to over nine per cent, but traders were wary about the strength of the move as the risk of recession in the US still loomed large.
Gains were underpinned by short covering in front-line stocks and buying by domestic mutual funds in a market that had fallen 11 per cent over five days to Tuesday, traders said.
Reliance Industries, India's largest listed firm, and leading private bank ICICI Bank led the rise. The two stocks account for more than a quarter of the main index.
"The nervousness will not go away so easily," said Arun Kejriwal, strategist at research firm KRIS. "I think we have not bottomed out yet."
The benchmark 30-share BSE index rose 348.60 points to 18,115.25, its highest close in more than a week, as it recovered strongly from early losses of as much as 1.8 per cent.
Twenty-five of the index's components ended stronger.
The market rose 3.7 per cent over the week, its first such rise in five weeks, but is still down 10.7 per cent this year.
"It was mainly a combination of technical bounce-back and short-covering of positions that took the markets to higher levels," said Subash Gangadharan, a technical analyst with HDFC Securities.
"The market could rise a little bit more before falling again. A sharp rally from these levels may not take place."
Asian stocks dipped yesterday after the head of the Federal Reserve said risks to US economic growth had increased, while global credit concerns resurfaced after a steep ratings downgrade of a US bond insurer.
Reliance Industries rose three per cent to Rs2,590.55 and ICICI Bank ended up 2.5 per cent at Rs1,191.15. Reliance and ICICI rose seven per cent and 11.7 per cent, respectively, on the week.
The broader 50-share NSE index rose 1.94 per cent to 5,302.90, its highest close since February 6.
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