Benchmark stock indices rose in the latter half of Tuesday’s trading session, erasing earlier losses, after crude oil fell, easing concern that energy costs will stoke inflation. HDFC Bank and ICICI Bank led the recovery in local stocks.
HDFC Bank, the country’s third biggest by market value, gained the most in almost three weeks. ICICI Bank, the nation’s second-biggest bank by assets, rose 1.4 per cent.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 31.87 points, or 0.2 per cent, to 14,482.22 points. The measure had earlier declined as much as 1.1 per cent. The S&P CNX Nifty Index on the National Stock Exchange added 2.15 points, or 0.1 per cent, to 4,337.50 points.
“The drop in oil prices will help curb inflation, easing concern on another increase in interest rates,’’ said R K Gupta, who manages the equivalent of about $100 million of stocks at Taurus Asset Management Company in New Delhi. “There is an inverse relation between the Sensex and the oil prices,” he added.
Crude oil for October delivery fell as much as 2.4 per cent to $112.36 a barrel on the New York Mercantile Exchange on Tuesday. Crude oil futures had earlier climbed to as much as $115.77.
Inflation at a 16-year high is increasing the likelihood that the central bank will raise interest rates a fourth time since June. Quickening price rises, coupled with a global slowdown, may weaken expansion in India’s $912-billion economy, Asia’s third largest.
State Bank of India advanced 1 per cent to Rs 1,370.70, while HDFC Bank climbed Rs 43.6, or 3.6 per cent, to Rs 1,251.30, the biggest gain since August 5.
Technology stocks
Satyam Computer Services, Wipro and Tata Consultancy Services led software developers higher after the local currency weakened past 44 to a dollar for the first time in more than 17 months.
Satyam, the country’s fourth-largest software company, gained the most since July 17. The stock advanced Rs 13.3, or 3.4 per cent, to Rs 406.75.
Wipro, the third-largest computer-services provider, rose 2.2 per cent to Rs 429.30, its biggest gain in three weeks. Tata Consultancy, the largest, gained 1.9 per cent to Rs 834.05. Infosys Technologies, the nation’s second-largest computer-services provider, fell after it offered to buy the Axon Group, a UK-based business adviser for companies that run SAP software, for $747 million in cash. Infosys fell Rs 8.45, or 0.5 per cent, to Rs 1,698.
Reliance Industries, the nation’s most valuable company, fell after a newspaper said the company may transfer 80 per cent of its stake in an offshore gas field to four units.
Reliance has sought permission from the oil ministry to allot the stake that’s been valued at $50 billion, the newspaper reported, without saying where it got the information. The company later confirmed the development. Reliance fell 2.4 per cent to Rs 2,179.35, its lowest in almost a month.
Overseas investors bought a net Rs 93.9 crore of domestic stocks on August 25, curbing their net outflow this year from equities to $7.05 billion, according to the nation’s stock market regulator.
Bosch surged 14 per cent to Rs 4,145.50, its biggest gain since December 4. The automobile parts-maker’s board will consider a proposal to buy back shares on September 2. Oil and Natural Gas Corporation (ONGC) rose rs 1.35, or 0.1 per cent, to Rs 1,015.90. A unit of the explorer agreed to buy Imperial Energy for Rs 1.4 billion pounds to tap Siberian deposits and make up for dwindling output at home.
