Business | Markets
Sensex posts highest close in a week
Indian shares shrug off inflation fears as strong growth in industrial output boosts sentiment.
- Reuters
- Published: 00:39 April 12, 2008
Bangalore: Indian shares rose 0.72 per cent yesterday to their highest close in a week, recovering from an intraday fall on a spike in inflation, with sentiment boosted by stronger-than-expected growth in industrial output.
The 30-share BSE index closed 112.54 points higher at 15,807.64, its highest close since April 3, with 18 components gaining. The market will be closed on Monday.
The index, which is down 22 per cent in 2008, gained 3 per cent on the week, its second weekly rise in the past three weeks.
The output data eased concerns about the extent of a slowdown in the economy, and gains in global markets on a view that fears of a global slowdown were overdone also lifted the market.
Reliance Industries rose 3.3 per cent to Rs2,550.05, its highest close since February 27. Company sources told Reuters that India's biggest listed firm was in talks with several oil majors to sell up to 10 per cent in its deep-water D6 block off India's east coast.
The stock, which accounts for more than 16 per cent of the main index, rose 9.8 per cent on the week, its strongest such rise in more than six months.
"Investors think this is probably the worst possible scenario in terms of the rise in inflation, and things can only get better from this point," said Nipun Mehta, chief executive at Unitis Tower Wealth. "The focus is now shifting to corporate earnings."
The market briefly turned negative on the inflation surprise, but its recovery was helped by later data showing industrial production rose 8.6 per cent in February from a year ago, above January's upwardly revised 5.8 per cent.
Major firms such as Infosys Technologies start releasing March quarter results from next week.
Infosys fell 2.1 per cent to Rs1,422.45 ahead of its earnings on Tuesday. It is forecast to report a 10.4 per cent rise in quarterly profit from a year ago.
The 50-share NSE index rose 0.95 per cent to 4,777.80, its highest close since February 28.
Elsewhere in the region, Karachi's 100-share index rose 0.82 per cent to 15,340.89.
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