Inflation check buoys Street

STCOK REPORT

Key share indices recouped losses to end up 1 per cent as fears that the Reserve Bank of India may hike banks' cash reserve ratio dimmed after inflation rate for the week to May 12 eased to a 35-week low of 5.27 per cent.

Gains in Suzlon Energy after rival Areva withdrew from the race for REpower, and short covering in technology shares also boosted broad market gains.

"Good amount of short covering in IT shares and the inflation figures helped the recovery on Friday. We are positive on the market as a lot of value is still left in it," a dealer said.

The Bombay Stock Exchange's 30-share Sensex ended at 14338.45, up 120.34 points or 0.9 per cent from Thursday. Intraday it moved between 14046.06 and 14364.95.

The National Stock Exchange's 50-share Nifty ended at 4248.15, up 43.25 points or 1 per cent. Intraday it moved between 4141.35 and 4256.40.

Turnover on both the exchanges was around Rs 14,880 crore compared with Rs 14,000 crore on Thursday.

The CNX Midcap Index ended up 0.3 per cent and S&P CNX 500 Index up 0.8 per cent.

Market had opened down 1 per cent tracking weak Asian and US markets after rising bond yields and robust new homes sales data in the US dampened hopes the Federal Reserve will lower interest rates any time soon.

Wind power major Suzlon Energy surged 18 per cent as it is all set to take control of German wind turbine major REpower Systems AG after it reached an agreement to end a bidding war with French nuclear energy group Areva SA.

Suzlon Energy will control REpower through a deferred investment plan by buying Martifer and Areva stakes in REpower over the next two years.

The deal will not result in any major cash outflow that will put pressure on the company's balance sheet, Chairman and Managing Director Tulsi Tanti on Friday said.

Brokerage CLSA Asia Pacific Markets has upgraded the stock to "buy" with price target of Rs 1,400. The stock on Friday closed at Rs 1,3600.

CLSA expects the stock to trade in line with global majors.

REpower is valued at 1.3 billion euros as per Suzlon Energy's bid price of 150 euros per share. Areva had bid 140 euros per share.

Information technology shares rose on short covering ahead of derivatives expiry Thursday taking the CNX IT Index up 2 per cent.

Satyam Computer Services and Infosys Technologies rose 3 per cent each, at Rs 473 and Rs 1,992, respectively.

May contract of Infosys Technologies provisionally ended at 2-point premium, while open interest dropped 6 per cent on short covering.

Zee Entertainment Enterprises gained 6 per cent to Rs 318. The stock looks technically sound and will touch Rs 340 next week, a dealer said.

Hindustan Lever gained 1 per cent at Rs 204 on a newspaper report it is planning to hike product prices by 10 per cent in select categories.

Spicejet surged 8 per cent to Rs 54 as the company said it expects to break even in Apr-Jun quarter. The company will detail Jan-Mar results after market hours.

ITC shares gained 1 per cent to Rs 168 after Jan-Mar net profit rose 15 per cent on year to Rs 650 crore. ITC will soon set up a unit for home and personal care products.

PTC India hit upper circuit of 10 per cent at Rs 67 on news it has roped in Financial Technologies and MCX to set up a national electronic electricity exchange.

Bank shares ended down as investors booked profits amid talk Reserve Bank of India may hike the cash reserve ratio to squeeze liquidity, dealers said.

But they ended off lows on short covering, dealers said.

HDFC Bank was down 2 per cent at Rs 1,075, and Punjab National Bank was down 0.4 per cent at Rs 533.

Bharat Petroleum Corp fell 2 per cent to Rs 364 after it Thursday reported disappointing Jan-Mar results due to inability to pass on higher prices of crude products to its customers, and also on account of a high base effect.

Hindustan Petroleum Corp, fell 3 per cent to Rs 279, on worries subsidy burden would erode the company's margins.

Cement shares fell ahead of the monsoon season where sales are limited, and due to pricing pressures, dealers said.

Ambuja Cement ended down 1 per cent at Rs 114.

Videsh Sanchar Nigam fell 2 per cent to Rs 466 after clocking sharp gains in the last two sessions.

Bharat Heavy Electricals ended down 0.3 per cent at Rs 2,703 ahead of its Jan-Mar earnings later on Friday.