Sensex ends below 16,500 and Nifty closes at 4,881 after profit-taking trims early gains
The Indian stock market opened on a firm note on Tuesday on the back of a solid overnight rally on Wall Street, but the early gains were trimmed on profit-taking after a sharp surge over the past four days. The Sensex closed at 16,441, declining 58 points, while the Nifty closed 17 points lower at 4,881.
Reliance Industries (RIL) gained 1% after the company announced its first oil discovery in its exploration block in the Cambay Basin off the Gujarat coast. Reliance holds 100% participating interest in the block which was awarded under the fifth round of the New Exploration Licensing Policy.
Carlos Ghosn, chief executive of French car maker Renault and Japan’s Nissan Motor Co announced that an agreement had been signed with Bajaj Auto for a low-cost car which would hit the road in 2012. However the Bajaj Auto stock declined 1%.
JSW Steel shot up 4% after group company JSW Energy received approval for an initial public offer from the Securities and Exchange Board of India (SEBI).
Edserv Softsystems zoomed 6% after announcing the launch of Vidhyadhana, an academy for imparting school education.
Unichem Laboratories gained 3% after the company received approval from the US Food and Drug Administration for its bulk drug facilities at Pithampur (Madhya Pradesh) and Roha (Maharashtra).
Kavveri Telecom Products rose 3% on reports that a wholly owned subsidiary had signed a pact with one of the major cellular operators.
Allaying concerns about an upturn in inflation, RBI deputy governor Shyamala Gopinath said the central bank would ensure adequate liquidity in the banking system and pointed out that capital inflows had picked up on improving growth prospects.
Among other Asian markets, benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan rose by between 0.1%-0.75%. According to Ma Delun, vice-governor, People’s Bank of China, China will grow at 8% in 2009.
Meanwhile, top forecasters are growing more confident that the US economy has embarked on a sustainable recovery. The Blue Chip Economic Indicators newsletter for November 2009 reported that forecasters had raised their 2010 projections for US gross domestic product for a fourth straight month. However, they still expect the pace of growth to fall short of the typical post-recession bounce. The newsletter said the US economy should expand 2.7% next year, marking an upward revision from the 2.5% pace the survey panel had expected a month ago.
On Monday, the Dow Jones Industrial Average closed 204 points higher, after the G20 nations pledged to keep aid flowing to the global economy. The S&P 500 index rose 24 points while the Nasdaq Composite Index gained 42 points.
European Central Bank (ECB) President Jean-Claude Trichet commented that risks to both global growth and inflation were currently balanced. He said global economic growth was a bit better than earlier expected, with emerging economies taking the lead. Some central banks, such as Norway and Australia, have already raised interest rates amid growing signs of economic recovery, while the ECB has signalled it will start rolling back some of its extra liquidity supplies.
— Swapnil Suvarna [email protected]