Indian shares rebounded on Friday after some consolidation the day before, with firm global cues supporting the liquidity-driven rally.
Asian markets rose across the board today and European shares extended gains for a third consecutive session, after encouraging data on the U.S. housing and labor markets as well as the broader economy sent Wall Street to its highest level this year overnight.
Sentiment also improved following reports that the Greek bailout talks remained on track and that a second bailout deal for the cash-strapped nation will be approved on Monday.
Commodities advanced and the euro was largely unchanged against the safe-haven dollar following unconfirmed reports that the European Central Bank would swap its Greek bond holdings to ease pressure on the beleaguered nation. The swap will be completed by Monday to ensure that the ECB stays out of the private sector debt-swap deal, Germany's Die Welt newspaper reported, quoting well-informed sources.
Meanwhile, the European governments are considering cutting interest rates on emergency loans to Greece and using contributions from the European Central Bank to "plug a new financing gap in the second bailout," the Bloomberg reported.
Benchmark indexes Sensex and the Nifty hit their highest level in more than 28 weeks early in the session before paring gains and ending up around 0.8 percent each. The BSE Sensex closed up 135 points or 0.75 percent at 18,289, with 19 of its components advancing, while the 50-share Nifty index climbed 42 points or 0.77 percent to 5,564.
Second-line stocks reversed early gains, with BSE mid-cap and small-cap indexes ending down marginally as investors resorted to some profit taking ahead of a market holiday on Monday to celebrate the auspicious festival of Mahashivratri.
Power stocks saw strong buying, with Tata Power rallying 4.7 percent and Reliance Power rising 2.9 percent, after Prime Minister Manmohan Singh asked Coal India to sign long-term fuel supply agreement with power producers to ensure sufficient supply of dry fuel. Shares of state-run Coal India, meanwhile, ended up 1.2 percent after plunging almost 6 percent the previous day.
Power equipment maker BHEL soared 6.5 percent on speculation of increased orders from NTPC. Rival BGR Energy jumped 9 percent and Larsen & Toubro ended marginally higher following reports that NTPC will soon place orders worth Rs 22,000 crore for supercritical equipment after winning legal battle in Supreme Court against Ansaldo Caldaie.
Bank shares continued to rally, with ICICI Bank and SBI gaining 1-3 percent on hopes of a 25-50 bps cut in the CRR at the March meeting and a repo cut in April. Allahabad Bank advanced 2.7 percent ahead of a board meet on February 22 to consider a preferential share issue to the government.
Utility vehicles manufacturer Mahindra & Mahindra rallied 3.3 percent, copper producer Sterlite gained 3 percent, software services exporter Wipro added 2.4 percent and property developer DLF ended 1.8 percent higher.
On the losing side Hindalco, Maruti Suzuki, Hero MotoCorp lost 2-4 percent, Gail India, Cipla and Bajaj Auto fell around a percent each, Tata Motors eased 0.7 percent and Tata Steel slipped 0.2 percent.
Rural Electrification Corporation gained 2.9 percent after its board approved a draft prospectus for raising Rs 1,500 crore in debt. Tata Metaliks jumped 4.7 percent on receiving board approval for a preferential share issue.
GTL soared 9 percent on debt-restructuring news. Reliance Communication added 1.1 percent on reports it has appointed another two banks for the Singapore listing of its undersea cable unit. Man Industries rose 2 percent on bagging an export order worth Rs.500 crore from the Middle East.
Shares of Thomas Cook India jumped over 7 percent in early trading before reversing direction and ending 3.8 percent lower.
by RTT Staff Writer
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