Indian shares rose sharply on Friday, with firm global cues and a stronger rupee on the back of persistent capital inflows from overseas investors underpinning sentiment. Bond yields fell in early trades and the rupee rose to a near five-month high of 52.55 against the dollar after the government decided not to increase its borrowing in the remaining period of the current fiscal year.
Stocks shed some early gains after ratings firm Fitch lowered its 2012 growth forecast for India to 6 percent from 6.5 percent, citing stagnating domestic demand and the deteriorating global growth outlook.
Separately, government data released today showed that the growth in India's core industries slowed to 2.1 percent in August as against 3.8 percent in the corresponding period a year ago, weighed down by negative growth in crude oil, natural gas, fertilizer and cement.
The benchmark BSE Sensex rose nearly 300 points to a high of 18,870 early in the session before paring gains to end up 183 points or 0.99 percent at 18,763, with 25 of its components advancing. Among those that fell, HDFC Bank, Gail India, SBI, BHEL and Infosys eased between 0.1 percent and 0.6 percent.
The broader Nifty index rose by 54 points or 0.95 percent to 5,703, while the BSE mid-cap and small-cap indexes ended up 1.1 percent and 0.9 percent, respectively. Auto, consumer durable, FMCG and metal stocks led the gainers, while realty stocks ended on a subdued note.
Automakers led the advances on expectations of improvement in sales during the festive season. Hero MotoCorp rose marginally, while Bajaj Auto, Mahindra & Mahindra, Maruti Suzuki and Tata Motors added 1-3 percent. Consumer durable goods stocks like Rajesh Exports, Whirlpool and Titan Industries also rose 1-3 percent on hopes of pick-up in demand on account of festive season.
Telecom major Bharti Airtel rose 1.3 percent, Reliance Communication gained 1.6 percent and Tata Teleservices rallied 2.5 percent, but Idea Cellular slid 0.7 percent after the Department of Telecom asked all mobile telecommunication carriers to cancel the pacts they signed with each other for sharing third-generation data services outside their licensed zones.
Major pharma stocks ended mostly higher after a ministerial panel finalized the pharma pricing policy under which 348 essential drugs will come under price control of the government. Dr Reddy's, Sun Pharma and Cipla rose between 1.5 percent and 2.5 percent. Among other prominent gainers, TCS, ITC, NTPC, Tata Power and Hindalco rose 2-3 percent.
YES Bank posted a modest 0.3 percent gain after it received RBI approval to foray into securities broking business. Aurobindo Pharma rose 0.6 percent after it received the U.S. FDA approval to manufacture and market Modafinil tablets. Larsen & Toubro edged up marginally amid news that its construction arm has bagged new orders worth Rs 2,130 crore from several clients during the month.
United Spirits tumbled 4.6 percent on profit taking following recent sharp gains after ICRA downgraded the ratings on the term loans and long-term fund based limits of the company. Group firm Kingfisher plunged 5 percent, United Breweries slumped 7.6 percent and United Breweries Holdings plummeted 8.4 percent.
On the global front, Asian markets posted widespread gains on Friday as news from both Spain and Greece where the respective governments outlined plans to further cut spending and raise taxes sent positive signals to financial markets. The proposed austerity measures announced amid fierce public protests and continued hopes for fresh Chinese stimulus following a record amount of liquidity injection into the banking system by China's central bank this week spurred some bargain hunting in beaten down shares following recent losses.
However, European stocks erased early gains ahead of the results of an independent stress test on the Spanish banking sector due out later today.
by RTT Staff Writer
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