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Sensex extends gains amid choppy trade
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MUMBAI: Indian shares retreated from a fresh 31-month high to end Wednesday 0.1 per cent higher, supported by continued foreign fund interest in the country's long-term growth story. However, trade was choppy as world equities fell on fresh concerns about the health of European banking system.
The 30-share BSE index rose 0.12 per cent or 21.65 points at 18,666.71, with 18 of its components closing in the green. Winning shares led losing ones in a ratio of 1.2:1 on a relatively better volume of 497 million shares. The 50-share NSE index closed 0.1 per cent higher at 5,607.85 points.
"Liquidity will support the market in the near term. But, it cannot always continue," said Ambareesh Baliga, vice-president of Karvy Stock Broking.
"If things deteriorate more in Europe, world markets could be impacted and India is no exception."
Bharti Airtel, Reliance Communications and Idea Cellular rose between one per cent and 2.6 per cent, on expectations of more upside from 3G revenues over the long term, dealers said.
Cigarette-to-hotel business ITC dropped 1.2 per cent as traders logged gains after the stocks' outperformance year to date.
Reliance Industries dropped 0.2 per cent, on lack of any near-term positive triggers, dealers said.
Sun Pharmaceutical Industries rallied 2.1 per cent after the Supreme Court of Israel ruled in favour of the drugmaker and paved the way for closing of its offer for Taro.
Financials mostly dropped on expectations the central bank will maintain its hawkish stance and raise rates at its policy review on Sept 16.
The Reserve Bank of India may not be ready to tone down its hawkish monetary policy just yet as it awaits more data to see whether signs of cooling growth are an aberration or a trend, three central bank sources said.
ICICI Bank and HDFC Bank shed one per cent and 0.7 per cent respectively. Housing Development Finance Corp dropped 0.4 per cent. State Bank of India bucked the trend and gained 2.1 per cent, as its chairman said the country's largest lender would like to merge associate banks as soon as possible.
The Economic Times report that the US state of Ohio had banned outsourcing of government IT and back-office projects to offshore locations such as India, raised fears of similar moves by other American states.
"It is sentimentally negative; but, IT companies get most of their contracts from the private sector and share of orders from government is not very big to make an impact," said Harit Shah, research analyst at Karvy Stock Broking.
Tata Consultancy Services gained 0.9 per cent. Infosys Technologies and Wipro firmed 0.6 per cent each.
Rural Electrification Corp closed 2.1 per cent higher at 350.45 rupees. SpiceJet climbed 1.7 per cent to 77.45 rupees. Gammon Infrastructure Projects climbed 6.6 per cent to 25.80 rupees.
KRBL was the volume leader with 14.6 million shares, followed by Shree Ashtavinayak with 8.7 million shares, and Piramal Healthcare with 8.6 million shares. -Reuters
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