First Published : 18 Dec 2008 10:33:00 AM ISTLast Updated : 18 Dec 2008 02:02:05 PM IST
MUMBAI: The BSE Sensex extended gains to more than 2 percent on Thursday afternoon, after annual inflation dropped to a nine-month low below 7 percent raising the prospect of deeper interest rate cuts in coming weeks.
Sentiment was also bolstered after the government said it was seeking extra spending of about $9 billion for the current fiscal year to the end of March as part of a fiscal stimulus to lift economic growth and offset the impact of the global slowdown.
At 1.23 p.m., the 30-share BSE index was up 2.06 percent at 9,915.67 points.
The 50-issue NSE index was up 2.07 percent at 3,015.50.
Earlier, Sensex was little changed in seesaw trade as energy stocks fell with oil trading near four-year lows, while banks climbed on rising expectations for a rate cut.
Investors were awaiting inflation data due by noon, which could set the tone for the market later in the day. A Reuters poll had forecast annual inflation at 7.49 percent in early December, the lowest in nine years.
Energy giant Reliance Industries fell 4.7 percent to 1,287.40 rupees on worries over its quarterly earnings, as crude prices stayed near four-year lows, despite a sharp cut proposed by the Organisation of Petroleum Exporting Countries.
State-run Oil and Natural Gas Corp, India's top explorer, fell 2.9 percent to 696 rupees. Crude was trading near $40 a barrel, as further evidence of slowing global
demand trumped OPEC's biggest ever production cut.
By 11:34 a.m., the 30-share BSE stock index was little changed at 9,715.19 points, after rising more than 1 percent and then falling 0.8 percent. Nineteen of its
components were trading higher.
"The undercurrent is not strong today. We are seeing buying for intra-day trade and then booking of profits," said Nitin Khandkar, senior vice president at Keynote Research.
Shares in outsourcers rose as investors rejigged their portfolios, traders said. Tata Consultancy Services rose 2.7 percent to 490 rupees, Infosys Technologies firmed
2.1 percent to 1,163.30 rupees and Wipro added 3.3 percent to 251 rupees.
Satyam Computer, beaten down by a third on Wednesday on investor concerns over corporate governance in the company, rose 6 percent to 167.55 rupees. Its shares in New York jumped 50 percent after it withdrew a plan to pay $1.6 billion for two infrastructure firms that management held stakes in.
Financial stocks rose as hopes strengthened the central bank would lower rates soon to bolster a slowing economy, following steep cuts by the United States on Tuesday.
"There is definitely expectation of a rate cut. Global cues have to be factored in," Khandkar said.
Top lender State Bank of India rose 1.1 percent to 1,215 rupees and private lender ICICI Bank gained 0.8 percent to 435 rupees.
In the broader market 1,112 declines led 822 advances on low volume of 116.5 million shares.
The 50-share NSE index was down 0.2 percent at 2,949.50 points.
STOCKS ON THE MOVE
* Patel Engineering Ltd rose 13.3 percent to 185 rupees after the firm received an irrigation contract worth 38.6 billion rupees in consortium with two other firms.
* Travel services firm Thomas Cook India Ltd rose 6 percent to 48.85 rupees after it priced its rights issue at 35.5 rupees each. Shareholders will get 35 shares for every 100 held.
* Maytas Infra extended losses for a second day, down 20 percent at 310.65 rupees, on concerns over financial closure of its Hyderabad Metro rail project, a day after Satyam Computer cancelled buying 51 percent in the firm at 475 rupees a share.
MAIN TOP 3 BY VOLUME
* Reliance Natural Resources on 10.9 million shares
* GVK Power & Infrastructure on 8.5 million shares
* Unitech on 6.7 million shares
