Indian shares rise, helped by funds injected into banking

Fri, May 16 05:51 PM

MUMBAI, India (AP) _ Indian shares ended higher Friday, helped by funds pumped into banking shares despite inflation rising at its fastest rate in nearly four years. The Bombay Stock Exchange's 30-stock Sensitive Index, or Sensex, rose 81.40 points, or 0.5 percent to close at 17,434.94.

On the rival National Stock Exchange, the 50-stock S&P CNX Nifty gained 42.45 points, or 0.8 percent, to end at 5157.70. The markets came slightly off early highs after India's inflation rate rose to 7.83 percent on year in the week ending May 3, staying above the central bank's comfort level of 5.5 percent for the 11th straight week.

Participants expect the Sensex to keep tracking global markets during the next week, but trade above the 17,000 level. "The markets were positive right through the day, even discounting higher inflation.

It's a show of tremendous strength that the markets are now not as easily swayed by negative triggers as some weeks back," said Rajesh Khanna, a dealer with Pioneer Intermediaries. Banking shares rose as investors bought on expectations the sector will continue to do well as long as India's economic growth continues at a steady pace.

HDFC Bank rose 1.8 percent to 1,502.30 rupees, State Bank of India gained 1.4 percent to 1,704 rupees and ICICI Bank closed up 1.3 percent at 941.15 rupees. Reliance Communications rose 2.2 percent to 601.85 rupees on hopes it would be able to command strong valuations for its telecom infrastructure unit.

Shares of state-run Steel Authority of India jumped 7.3 percent to 185.90 rupees after the company reported a 25 percent on-year growth in net profit at 23.80 billion rupees. Indian markets will be closed on Monday because of a national holiday.

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