Index gains 464 pts to close at 8,915; Reliance Industries, HDFC Bank lead rally.
Ending a seven-day, 20 per cent decline in the Sensex, stocks gained today as some investors judged recent declines as excessive.
Reliance Industries, India’s most valuable company, rose 6.5 per cent, also halting a seven-day slump. HDFC Bank, the nation’s third-largest lender, added 4.3 per cent.
“The market was looking very oversold,” said Jayesh Shroff, who helps manage the equivalent of $2.4 billion in equities at SBI Asset Management in Mumbai. The Sensex gained 464.20 points, or 5.5 per cent, to end the day at 8,915.21 points. The index posted its second weekly decline by falling 5 per cent.
The S&P CNX Nifty of the National Stock Exchange (NSE) added 140.30 points, or 5.5 per cent, to close at 2,693.45 points. The BSE 200 Index climbed 4.1 per cent to 1,048.86. Nifty futures for November delivery added 7 per cent to 2,730.05.
The Sensex has lost 56 per cent this year as global financial companies’ losses and writedowns from the collapse of the US subprime mortgage market neared $1 trillion, eventually toppling Lehman Brothers Holdings.
Reliance gained 6.5 per cent to Rs 1,124.35, the most in almost two weeks. HDFC Bank added 4.3 per cent to Rs 856.45, the most since November 3. HDFC’s 14-day relative strength index, which measures how rapidly prices rose or fell during the period, dropped below 30 yesterday. Some investors regard readings at 30 or less as a signal to buy.
Maruti Suzuki India, the nation’s biggest car maker, gained 5.7 per cent to Rs 509.95. Its relative strength index fell to 29.9 yesterday.
Overseas funds sold a net Rs 280 crore ($52 million) of Indian stocks on November 19, increasing outflows from equities this year to $13.1 billion, the Securities and Exchange Board of India (Sebi) said.
DLF and Unitech-led real estate companies fell on speculation that banks will not fund real estate projects unless developers cut prices of property to boost demand. DLF, the nation’s largest developer, fell by Rs 7, or 3.4 per cent, to Rs 198.25. Unitech dropped Rs 3, or 8.6 per cent, to Rs 32. Housing Development & Infrastructure dropped by Rs 3.6, or 4.1 per cent, to Rs 84.
Birla Corporation, an Indian maker of jute products, automobile parts and cement, gained Rs 4.8, or 4.8 per cent, to Rs 105.7, the highest since October 7 after 2.2 per cent of its equity changed hands in a single transaction. The shares have fallen 68 per cent this year.
Oil & Natural Gas Corporation rose by Rs 36.55, or 5.6 per cent, to Rs 687.65, the most since November 10. India’s biggest explorer said oil would return to $100 a barrel, justifying its £1.4 billion ($2.1 billion) takeover of the UK’s Imperial Energy.
