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Sensex closes at 2-week high

The 30-share index gains 226 points to 17,813.62 on hopes of reforms

Reuters  |  Mumbai 

The ended at its highest in more than two weeks, led, by gains in after positive comments about orders from its chief executive, while advanced on hopes of government reforms in the pricing of natural gas.

The advances came on a positive day across Asian stock — with the MSCI index of Asia-Pacific shares outside Japan up more than one per cent — as optimistic signs about the US economy defined the mood ahead of the Federal Reserve's policy meeting later in the day.

Still, trading in India is expected to remain volatile this week, ahead of key events such as the inflation data and the railway budget tomorrow, followed by the Reserve Bank of India's policy review on Thursday and the unveiling of the 2012-13 Budget on Friday.

Of these, the Budget is likely to be the most consequential, dealers said, amid growing optimism about domestic corporate earnings, especially for those sectors such as information technology (IT) services that are more closely tied to the US economy.

“The important thing to watch in the budget is whether the government does something on the oil subsidy front and boosts the investment cycle,” said Gopal Agrawal, CIO at Mirae Asset Mutual Fund, which manages over $1 billion (Rs 5,000 crore) in Indian equities.

The main 30-share BSE index gained 1.28 per cent, or 225.95 points to 17,813.62 points, its highest close since Feb-ruary 24. The 50-share index also advanced 1.3 per cent, ending at 5,429.50 — its highest close since February 23.

On top of fundamental reasons, some technical indicators are raising hopes of more gains ahead. The Nifty, for example, appeared to be entering the so-called ‘Golden Cross’, when the 50-day moving average rises above the 200-day moving average. If sustained, that would mark the first such instance since mid-2009, which went on to be followed by a nearly two-year surge in the index.

Among individual gainers, Infosys, the country's No. 2 software services exporter, rose 1.5 per cent after its chief executive discussed a “pretty strong” pipeline of large orders in the current quarter.

ad-vanced 2.7 per cent, marking a third consecutive session of gains, with dealers mentioning continued speculation that the government was moving towards a more liberal approach to pricing of natural gas from domestic exploration.

Other gainers included Natco Pharma Ltd, which rose two per cent in a consecutive session of gains, after Germany's Bayer was forced to grant a compulsory licence for its cancer treatment drug to the Indian firm.

Among the decliners, shares in Biocon Ltd dropped 6.3 per cent after Pfizer Inc scrapped a deal to sell insulin products made by India's biggest biotech company.

The termination leaves Biocon without a partner to sell the drug in key global such as the United States.

Wipro fell 1.6 per cent after the company said that a trust controlled by its billionaire founder Azim Premji plans to sell up to 35 million shares, or around 1.4 per cent stake in the company, on the stock market.

First Published: Wed, March 14 2012. 00:00 IST