Indian shares extended gains for the fifth straight session on Friday, shrugging off initial weakness in the wake of weak global cues after major central banks ECB and the Fed stayed put on announcing additional stimulus measures.
Stocks opened on a weak note, as a mixed finish on Wall Street overnight and the retreat across Asia following China's surprise rate cut prompted investors to book some profits following recent sharp gains. Also, European stocks lost ground and the rupee was a tad weaker against the dollar, rendering the underlying mood cautious in the afternoon.
Risk sentiment turned bullish in late trading, as a further retreat in commodity prices, especially the fall in Brent crude prices to just below $99 a barrel brightened the chances of interest rate cuts at the upcoming RBI monetary policy meeting on June 18.
The movement of rupee and oil going forward will have a significant impact on capital inflows in the near term. If experts are to be believed, oil has entered a so-called bear market, making outlook better for Indian equities.
Reversing early losses, the benchmark 30-share BSE Sensex ended the session up 70 points or 0.42 percent at 16,719, while the broader Nifty index rose by 19 points or 0.37 percent to 5,068. Second-line stocks posted modest gains, with the BSE mid-cap and small-cap indexes rising about 0.2 percent each.
Shares of infrastructure-related companies continued to move up after Prime Minister Manmohan Singh announced a big push to infrastructure development. Larsen & Toubro rallied 2.5 percent, BHEL rose 1.6 percent, Tata Power gained 1.1 percent and NTPC added half a percent. HCC, NCC and Reliance Infrastructure jumped 3-4 percent.
Copper producer Sterlite Industries rallied 3.5 percent on fund raising reports, FMCG player Hindustan Unilever rose 1.4 percent on hopes of good rainfall this year and state-run gas utility Gail India advanced 3.1 percent. ITC and Reliance Industries erased early losses to end more than a percent each.
Among rate-sensitives, realtor DLF rose 1.2 percent, automakers Hero MotoCorp and Tata Motors added 0.7 percent and one percent, respectively, while private sector lender ICICI Bank edged down modestly on profit taking.
Rival HDFC Bank edged up a modest 0.2 percent and state-run lender SBI gained half a percent. Telecom major Bharti Airtel gained a percent after it bagged exclusive mobile and video content rights for the UEFA Euro 2012 football tournament beginning on June 8.
Inox Leisure soared 6.7 percent ahead of a board meeting next week to consider a merger plan. Alstom Projects rose half a percent on winning new orders from NTPC. Likewise, Tecpro systems jumped 2.6 percent on winning a $32.7-million order from Korea's Hyundai Rotem Company.
Piramal Health advanced 0.7 percent after completing an acquisition. Tata Teleservices ended down marginally after threatening legal action against the government's plan to levy higher spectrum charges favoring incumbent GSM players.
On the global front, other Asian markets fell across the board, albeit posting modest losses, as hopes of stimulus measures faded and China's surprise cut in interest rates raised concerns about a deluge of economic data due out this weekend.
Commodities from oil to copper tumbled and the 17-nation euro drifted lower against the dollar and yen, as no further stimulus from the ECB and the Fed coupled with mounting worries over Spain's finances prompted investors to pare some long positions ahead of the weekend.
European stocks also moved to the downside, but were off their day's lows reacting to a slew of data from Germany, France and the U.K. According to reports, eurozone finance ministers will be holding a meeting on Saturday to discuss aid for Spain. The EU is said to be having necessary tools in case Spain needs aid.
by RTT Staff Writer
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