Rally in tech shares propel India's market index higher

Wednesday, 18 June 2003, 07:00 Hrs
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MUMBAI: Indian's benchmark share market index finished sharply higher Tuesday, after slipping marginally lower in the previous session, on increased foreign fund inflows and fresh buying in stocks of technology companies.

Dealers said that the market opened strong and kept surging higher for better part of the intra-day trading session on large-scale institutional buying in technology stocks, tracking a sharp overnight rally in U.S. markets.

The market mood was further boosted by increased investments on the bourses by foreign institutional investors, which act as the backbone for India's liquidity starved capital market.

Mirroring the bullish sentiment, the stock market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed at 3,431.03, netting a gain of 94.39 points or 2.83 percent over its previous session's close.

"The market mood is very bullish at this stage and investors are rushing to utilise every single opportunity to enlarge their position in heavyweight counters," said a fund manager with a foreign brokerage firm.

"The market rally is gradually becoming very broad-based and this is a very encouraging sign. Although the market will witness occasional profit taking by bear operators but overall sentiment is positive and the up-trend will continue."

The market rally was mainly triggered by large-scale institutional buying in shares of blue-chip software companies that had witnessed massive selling pressure last month on earning growth concerns.

Analysts say investors are returning to tech counters following a rally in tech counters on all major stock markets globally. The tech-laden Nasdaq stock exchange rose 2.5 percent Monday.

Foreign funds have also increased their investments in the market on hopes that distribution of monsoon rains would be normal all across India this year after the worst drought in three decades last year.

The quantity of rainfall in the June-September period is crucial for the farm sector that accounts for nearly a quarter of the gross domestic product and employs 70 percent of the country's over one billion population.

Foreign funds have bought $221.1 million worth of shares so far this month, after net purchases of $254.8 million in May.

In the tech sector, Infosys Technologies, India's largest listed software exporter, gains 6.1 percent to touch 3,096.50 and HCL Technologies, a New Delhi-based software development and services major, ended 4.8 percent higher at 153.45.

Hyderabad-based Satyam Computer closed with a gain of nearly three percent at 189.10 following the sharp overnight rally in the Nasdaq exchange.

In the old economy sector, Dr. Reddy's Laboratories gained 6.1 percent to touch 1,060.15 and Cipla closed with a gain of 2.5 percent at 756 on sustained buying interest on counters of drug makers.

Bajaj Auto advanced 4.5 percent to touch 567.75 and Hero Honda Motors, the country's largest motorcycle maker, ended 4.3 percent higher at 250.90 on hopes that a normal monsoon would lift the fortunes of automobile companies.

Reliance Industries, the largest refiner and petrochemicals maker, rose nearly five percent to 322.05 after the company said Monday it had struck oil in an onshore block in Yemen.

"The Yemen discovery is expected to be equivalent to about half of Reliance's share of crude oil from the Panna-Mukta-Tapti offshore fields in the Bombay High region," Mukesh Ambani, chairman of Reliance Industries, told a shareholders meeting.
Source: IANS
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