Indian Market Closes Higher as Oil Retreats

123jump.com Staff
09 Jul, 2008
New York City

The BSE Sensex closed up 4.60% from the previous day''s close. Market breadth was positive with 2130 stocks advancing versus 529 stocks that dropped. On the BSE, the mid-cap index rose 2.91%, the small-cap index added 3.46% and BSE 500 surged 4.24%. Realty, power and banking stocks led the rally. Reliance Industries rose 5.1% to 2,079.95 rupees after signing an agreement with Peru''s Perupetro to jointly explore for oil and gas in the Andean country.

[R]10:00AM New York, 7:30PM Mumbai - Indian equities rose today on hopes that the government may push through economic reforms which the Left parties had blocked over the past four years.[/R]

Market sentiment

India shares rose on Wednesday on hopes that the government may push through economic reforms. Over the last four years, Left parities had stalled privatisation of state-run firms, pension reforms, higher foreign limits in insurance and more liberal norms for foreign banks.

The Left parties said on Tuesday they are withdrawing support to the Congress-led United Progressive Alliance government to protest Indo-US nuclear deal. The government is expected to face a vote of confidence in parliament in the coming weeks.

The government is confident of retaining power due to backing from Samajwadi Party, a regional party in Uttar Pradesh. Samajwadi Party said it would vote with the government in support of the nuclear deal with the United States.

In Mumbai trading, the 30-share BSE Sensex surged 4.6% or 614.61 points at 13,964.26. On the National Stock Exchange, the CNX Nifty index gained 4.2% or 168.55 points at 4,157.10.

Of the BSE traded stocks, 2,130 shares gained, 529 declined and 67 stocks remained unchanged.

Trading statistics

Reliance Natural Resources clocked the highest volume of 2.58 crore shares on BSE followed by IFCI, Idea Cellular, IndusInd Bank and Ispat Industries.

Reliance Capital was the most active stock on the BSE with the highest trading turnover of 255.22 crore rupees.

Political turmoil in India is unlikely to impact economic growth this fiscal year, the government said on Wednesday.

Communist parties, which provided the government with a parliamentary majority for the last four years, but withdrew support on Tuesday the ruling coalition hopes to remain in power with the votes of a regional party.

India''s economy rose 9% in 2007 and 2008, and the Reserve Bank of India expects it to moderate between 8% and 8.5% this year.

Meanwhile Finance Minister P Chidambaram on Wednesday said the right attitude and patience could help the country to overcome economy challenges like the soaring inflation it is facing.

He said India had bailed itself out of other crises like the first oil shock in 1973 and the 24% inflation rate in between 1979 and 1980. He also reiterated that the growing rates of crude oil had influenced prices commodities and metals, leading to overall rise and inflation.

Gainers and losers

Realty stocks rose. Lanco Infratech was up 13.6% to 320.75 rupees, Indiabulls Real Estate surged 6.9% to 284.70 rupees and DLF advanced 4.8% to 450.30 rupees.

Power stocks climbed. NTPC gained 4.3% to 168.20 rupees and Tata Power Company climbed 3.1% to 1,061.40 rupees.

Banking stocks gained. Axis Bank rose 10.1% to 669.75 rupees, ICICI Bank was up 4.7% to 6,321.90 rupees and HDFC Bank rose 5.7% to 1,058.75 rupees.

Reliance Industries rose 5.1% to 2,079.95 rupees.

According to reports, the company signed an agreement with Peru''s Perupetro to jointly explore for oil and gas in the Andean country.

The two firms are likely to bid in a Peruvian government auction of 22 oil blocks with hydrocarbon potential. As part of the deal with Pan Andean, Reliance will incur all exploration costs through commercial discovery. Following a commercial find of an agreed size, Pan Andean will reimburse Reliance for its share of the exploration cost.

Reliance Infrastructure gained 10.7% to 835.45 rupees, Reliance Power surged 8.6% to 148.75 rupees and Reliance Communications rose 6.15% to Rs 440.95.