Sensex at 7-week high, fuel retailers slide
Sensex today rose 0.7% to their highest close in seven weeks in thin year-end volumes, led by Infosys Technologies, Larsen & Toubro and gains in some automobile shares.business Updated: Dec 30, 2010 16:59 IST
Sensex on Thursday rose 0.7% to their highest close in seven weeks in thin year-end volumes, led by Infosys Technologies, Larsen & Toubro and gains in some automobile shares.
State-run oil marketing firms Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum fell between 1.5 to 3% after the Government deferred a decision on a possible increase in diesel and cooking gas prices.
The 30-share BSE index ended up 133.04 points, at 20,389.07, with 25 of its components rising. It traded in a narrow range through the session on thin volumes, despite the expiry of monthly derivative contracts on Thursday.
"The build up in open interest is subdued and volatility has been low. The market is a little more than fairly valued at this point, so there is still fear that a downside is round the corner," said Deepak Jasani, head of retail research at HDFC Securities.
Traders said volumes had dipped as investors avoided building positions before the year end.
For the year, the index is up nearly 17%, helped by record foreign fund inflows of $28.5 billion into local equities and most investors are optimistic that a robust growth outlook for the economy bodes well for the domestic equities market in 2011.
"People are expecting next year allocations to India will be as good or even better," said Gajendra Nagpal, chief executive at Unicon Financial Intermediaries.
On Thursday, gains were led by outsourcers on renewed hopes of stability in the U.S. economy, which they count as their largest market.
India's No 2 software services firm Infosys closed up 1.2%, while larger rival Tata Consultancy Services gained 1.1% and No 3 Wipro added 0.2%.
Larsen & Toubro, India's largest engineering and construction firm, ended 0.9% higher at 1,972.15 rupees, helped by order wins worth $259 million.
Shares in automakers Tata Motors and Hero Honda rose 1.9% each, while top carmaker Maruti Suzuki and Mahindra & Mahindra ended marginally higher. Most vehicle makers are expected to announce price increases in early January.
State-run fuel retailers were among the worst performers, on worries of under-recoveries. Indian Oil Corp fell 2.8%, while Hindustan Petroleum Corp lost 1.8% and Bharat Petroleum Corp slipped 1.4%.
While state-run companies set petrol prices, prices of diesel and cooking fuels continue to be fixed by the government.
Sources told Reuters a ministerial panel meeting scheduled for Thursday to discuss a possible rise in fuel prices had been deferred and a new date was yet to be fixed.
Shares in state-run explorer Oil and Natural Gas Corp, which also shares the subsidy burden on auto fuels, lost 0.6%.
Weekly food and fuel inflation accelerated for the fourth straight week on higher prices of vegetables, government data on Thursday showed. The food price index rose to a 10-week high of 14.44% while the fuel price index climbed 11.63% in the year to Dec. 18.
In the broader market, gainers were ahead of declines in the ratio of 1.33:1, with about 329.5 million shares changing hands.
The 50-share NSE index closed up 0.7% at 6,101.85 points, its highest close since Nov. 15.