Wednesday, March 07, 2007

Techs lead Indian stock market rally

Indian shares rose 2.27 per cent yesterday after two days of heavy losses, lifted by gains n Asian stocks and as buying emerged in index heavyweights like Infosys Technologies and Reliance Industries.

The 30-issue benchmark BSE index closed up 282.05 points at 12,697.09, with 22 components ending in positive territory, after it had hit a five-month closing low on Monday. Opinion was divided on whether the recovery would continue.

"The correction was not due to any fundamental factor. It was purely technical," said A. Balasubramanian, chief investment officer at Birla Sun Life Mutual Fund. "If the global markets settle down, recovery should continue."

But Vinod Bansal, director at New Delhi-based, said the index could fall to 11,900 before getting a fillip from March quarter corporate results next month.

"This is just a pullback rally as the Asian markets are up today. But I see our markets consolidating further," Bansal said.

Major Asian markets rose after a week of losses as bruised investors picked up shares in firms that had been beaten down during a global sell-off.

Technology stocks led gains on the Mumbai market, with Infosys rising 5.5 per cent and Satyam Computer Services rose 4.9 per cent. The information technology sector index gained 4.9 per cent.

Reliance Industries, India's top private firm and the index's largest stock, gained 3.2 per cent.

But many mid-cap and small-cap stocks remained weak, and 1,464 losers beat 1,083 gainers on volume of 241 million shares in the broader market. The mid-cap index finished up 0.48 per cent, but the small-cap index fell 0.18 per cent.

"This might be because of margin calls. People are liquidating positions in the broader market and holding frontline stocks," said Amit Hiremath, an analyst at IDBI Capital Market, who expects the index to extend its recovery.

The 50-issue NSE index closed up 2.21 per cent at 3,655.65.

Engineering and construction firm Larsen & Toubro rose 3.2 per cent to Rs1,427.60 after a spokes-man said the firm was in talks with Japan's Toshiba Corp to form a joint-venture for to make power-plant equipment.

Software firm Hexaware Technologies rose 5.1 per cent to Rs152.65 after 2.5 million shares, or 1.9 per cent of its share capital, changed hands in a block deal on the BSE at Rs148.

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