By SUDEEP JAIN (wallstreet journal)
MUMBAI –Indian shares rose on the back of solid gains in other Asian markets Monday, but came off their early highs due to profit-taking in consumer goods stocks following recent sharp advances.
The Bombay Stock Exchange’s Sensitive Index rose 51.68 points, or 0.3%, to close at 18814.48.
On the National Stock Exchange, the 50-stock S&P CNX Nifty gained 23.30 points, or 0.4%, to end at 5,650.50.
Trading volume on the BSE rose to 29.91 billion rupees ($670 billion) from Friday’s 27.38 billion rupees. Gainers outnumbered decliners 1,766 to 1,075, while 123 stocks were unchanged.
Markets across Asia were buoyed by steep gains on Wall Street Friday, after data released by the Institute of Supply Management showed that the U.S. manufacturing sector expanded briskly in June.
Hong Kong’s Hang Seng surged 1.7%, Japan’s Nikkei rose 1.0% and China’s Shanghai Composite jumped 1.9%.
The positive sentiment lifted Indian stocks, which have gained 7.2% over the past eight sessions.
“The fact that we are managing to hold our ground despite the sharp rally in recent sessions is a sign that sentiment has turned positive,” said Avinash Gupta, vice president at Global Capital.
He expects the markets to consolidate in the coming sessions and stabilize around current levels ahead of the release of April-June quarterly earnings, which start next week.
Of the 30 Sensex constituents, 19 ended higher Monday.
Reliance Industries, India’s largest company by market capitalization, rose 0.7% to 868.15 rupees on bargain-buying following a 4% fall in the previous session.
Interest-rate sensitive stocks led by realty shares rose as traders squared off short positions on hopes that interest rates have peaked. Property developer DLF surged 6.0% to 233.60 rupees.
Among financial stocks, HDFC Bank rose 1.4% to 2,532.30 rupees, while gains in autos were led by Tata Motors, which climbed 1.8% to 1,012.00 rupees.
The Sensex’s biggest underperformers in 2011 so far saw value buying. Reliance Infrastructure jumped 6.8% to 578.70 rupees and Reliance Communications closed 3.3% higher at 100.60 rupees.
Mid-cap and small-cap stocks, which have lagged the Sensex over the past one month, outperformed large caps. The BSE mid-cap and small-cap indexes rose 0.9% and 1.2%, respectively.
Among the losers, consumer goods dipped on profit-taking following the sector’s recent outperformance. ITC fell 1.3% to 199 rupees while Hindustan Unilever closed 0.2% lower at 336.05 rupees.
Among other decliners, power producer NTPC slipped 0.8% to 184.50 rupees and engineering firm Larsen & Toubro shed 0.9% to 1,791.80 rupees.