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| PSU stocks gain as Sensex logs first weekly gain in three weeks |
| BS Reporter / Mumbai Nov 07, 2009, 00:52 IST |
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The BSE Sensex climbed 0.6 per cent on Friday, posting its first weekly rise in the past three weeks, with banks leading the rebound as investors picked bargains after last month’s fall. Gains in global stocks after the US labour department said initial claims for state unemployment benefit had dropped to their lowest level since early January also underpinned the market.
The past four days have been a roller-coaster ride for stock markets. The Sensex swung in a broad range of almost 1,000 points before closing up 1.65 per cent, or 262 points, at 16,158.28, and the Nifty rose 1.79 per cent, or 84.45 points, to coose at 4,796.15.
On Friday, the Sensex rose 95 points to close at 16,158.28. Bank stocks were bolstered after Standard & Poor’s said yesterday that the banks would gain more than they would lose from tighter loan provisioning requirements. Top lender State Bank of India rose 3.1 per cent, its biggest rise in three weeks, to Rs 2,204.20, while ICICI Bank added 0.5 per cent to Rs 848.75.
The Reserve Bank of India had said on October 27 that banks must increase the minimum loan-loss coverage to 70 per cent by September 2010. SBI and ICICI are still down 4.4 per cent and 4.7 per cent, respectively, since October 26.
“I think they (banks) are just catching up after lagging for a while. The pattern these days is that when people find a laggard, they want to enter at attractive levels,” said Rakesh Rawal, head of private wealth management at Anand Rathi. The leading Sensex gainers were Bharti Airtel (up 9.5 per cent, or Rs 27.75, at Rs 319.90), Jaiprakash (up 8.4 per cent, or Rs 17.65, at Rs 227.80), ICICI Bank (up 7.5 per cent, or Rs 59.15, at Rs 848.75) and Tata Steel (up 6 per cent, or Rs 28.10, at Rs 499.70). M&M and Maruti gained between 5-6 per cent.
Among the laggards, Tata Power shed 5.3 per cent, or Rs 71.70, at Rs 1,271, ACC gave up 4.2 per cent, or Rs 31.10, at Rs 716.55 and Hindustan Unilever lost 3.5 per cent, or Rs 9.95, to close at 273.
The index is up around 67 per cent from the end of 2008, with foreign funds investing more than $14 billion in Indian equities this year.
The index for public sector companies rose 3.9 per cent after the government yesterday mandated more sales of their shares and changed the rules on how it could use the proceeds. The move was aimed at boosting revenues and reining in a widening Budget deficit.
State-run NMDC hit its upper limit of 10 per cent while Steel Authority of India and Shipping Corporation of India rose 1.3 per cent and 2.5 per cent, respectively. Larsen & Toubro rose 2.2 per cent to Rs 1,575.70 after 4.2 million shares changed hands.
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