BSE Sensex gains on value buying on derivatives expiry day

By Manoj Dharra

MUMBAI (Reuters) - The Sensex rose for a second straight day on Thursday as recent underperformers such as ICICI Bank Ltd gained in a session marked by the expiry of derivatives and as technology shares edged up on hopes about upcoming quarterly results.

Despite ending the fiscal year on a positive note, Sensex fell 3 percent in the quarter after edging down 0.1 percent in March, marking its first quarterly fall in five.

March has been a particularly volatile month because of lingering disappointment over the 2013/14 budget unveiled late in February. Sentiment has also been marred since the DMK withdrew from the ruling UPA and by the Reserve Bank of India's cautious stance on future rate cuts.

 

Broader sentiment is expected to remain weak as data after market hours showed the current account deficit for the October-December quarter widened to a record high of 6.7 percent of gross domestic product.

"Current levels are attractive but CAD numbers are a concern and deteriorating GDP numbers on a quarter on quarter basis are another concern for the markets," said K K Mital, head of portfolio management at Globe Capital.

"Threat of early elections and reforms not sailing through are bothering the markets currently."

The Sensex ended up 0.7 percent, or 131.24 points, at 18,835.77, rebounding after hitting its lowest intraday level since November 26, 2012. March derivatives expired at the end of the session.

However, the index rose 0.5 percent for the week, marking its first weekly gain in three. Markets will be closed on Friday for a public holiday.

The broader Nifty rose 0.73 percent, or 40.95 points, to 5,682.55, after briefly breaking below its 200-day moving average.

Recent underperformers led gainers, with ICICI Bank rebounding from earlier falls of as much as 1.44 percent to gain 2.4 percent. Shares in India's biggest private sector lender had fallen 4.5 percent in the previous six sessions.

Other shares also gained on value buying, with HDFC Bank ending up 1.8 percent and Larsen & Toubro rising 2.15 percent.

Among other gainers, Tech Mahindra Ltd rose 2 percent and Satyam Computer Services Ltd gained 1.02 percent after Goldman Sachs initiated coverage of both companies with "buy" ratings.

Goldman said the planned merger between the two companies would create the fifth largest Indian IT offshoring company by revenue, offering "adequate scale to target potential big-ticket deals.

Infosys Ltd rose 1.22 percent ahead of its quarterly earnings due on April 12, while HCL Technologies gained 2.5 percent.

Aurobindo Pharma Ltd surged 12 percent after the company said the U.S. Food and Drug Administration had lifted import alerts for some products manufactured at its Hyderabad facility.

Novartis India Ltd rose 3.75 percent after parent Novartis AG said in a statement it would sell shares of its Indian unit via stock exchanges to reduce its holding.

Private sector lender IndusInd Bank Ltd gained 1.3 percent and iron ore producer NMDC Ltd ended 2.1 percent higher, as the stocks will be included in the NSE index from April 1.

(Editing by Subhranshu Sahu)