Sensex gains 0.4%; lenders and Ranbaxy rise | business | Hindustan Times
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Sensex gains 0.4%; lenders and Ranbaxy rise

business Updated: May 11, 2011 16:43 IST

Reuters
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The BSE Sensex ticked 0.4% higher on Wednesday, buoyed by firm world equities, but the gains lacked conviction as foreign funds mostly passed up Indian equities on concerns rising interest rates could stifle the pace of economic growth.

Financials rebounded after declining earlier this month. The banking sector index recovered 0.5% in the day, but is still down 3.7% for the month.

Ranbaxy Laboratories jumped 6.1% after the top drugmaker by sales reported a lower-than-expected fall in quarterly net profit late on Tuesday.

The 30-share BSE index climbed 0.39%, or 72.19 points, to 18,584,96 points, with 23 of its components closing in the green. It swung between positive and negative territory in the day.

The 50-share NSE index, or Nifty , firmed 0.4% to 5,565.05.

"It looks like the Indian market gained today as world stocks were doing good," said Sunder Subramaniam, senior manager of sales at brokerage Sharekhan.

"Also, there are some expectations being built ahead of tomorrow's IIP data," he said, referring to the industrial output data for March.

Industrial output in Asia's third-largest economy probably rose 3.8% in March from a year earlier, helped by strong exports and infrastructure output but weighed by a high base effect, the median forecast in a Reuters poll showed.

Foreigners have dumped more than $1 billion of stocks in nine out of the 11 sessions to Monday, latest data from the market regulator showed.

"FIIs (foreign institutional investors) know that the Indian market is not going to run up in a big way any time soon," said Arun Kejriwal, director of research firm KRIS.

"With average earnings and interest rate issues, which may hurt economic growth, where is the bullishness?"

Last week, the Reserve Bank of India stepped up its fight against rising prices, increasing interest rates more than expected and vowing to battle price pressures even at the cost of some economic growth.

After the market closed for trade, Finance Minister Pranab Mukherjee said the economy may not grow around 9% in the current fiscal year to end-March 2012 due to volatility in international commodity prices and other supply constraints.

Gainers beat losers in the ratio of 1.4:1 in the broader market on a volume of nearly 500 million shares on the NSE, lower than the 30-day average daily volume of 659 million shares.

Brokerage Edelweiss forecast the Nifty would be rangebound at 5,500 to 5,650 in the short term.

Lenders rebounded with State Bank of India , ICICI Bank and HDFC Bank rising between 0.1% and 1.8%.

Software firms gained after poor sector performance in recent sessions. The sector index firmed 0.8%, but was still down nearly 7% since the end of the March quarter.

Infosys Technologies and Wipro gained 0.9% and 0.7%, respectively, while bigger rival Tata Consultancy Services closed barely changed.

The MSCI world equity index was up 0.4% by 1023 GMT, while the Thomson Reuters global stock index firmed 0.3%.