Indian shares rise nearly 1 pct; telcos rebound

Published: 05 Nov 2009 17:09:02 PST

* Bharti, Reliance Comm rise on bargain hunting after slump

* Infosys drops as chairman's wife sells shares for $92 mln

* Patni rises 8.2 pct on report L&T unit eyeing stake (Updates to close)

MUMBAI, Nov 5 - Indian shares climbed nearly 1 percent on Thursday, with bruised telecom stocks among the gainers, as bargain hunters stepped in toward the close after the market fell more than 2 percent.

Bharti Airtel <BRTI.BO>, the country's top mobile operator, and rival Reliance Communications <RLCM.BO> rose 4.5 percent and 5.3 percent respectively after they had slumped in the past one month.

"I think these stocks are a good buy from a medium to long-term perspective," said K.K. Mital, head of portfolio management services at Globe Capital. "Negatives were more than priced in the sharp fall we saw."

The stocks were also helped by an Economic Times report that the telecom ministry would seek a fast-track approval from the finance ministry to cut the annual licence fee paid by large operators by up to a third. [ID:nDEL175690]

Bharti and Reliance Communications are still down nearly 24 percent and more than 42 percent respectively since the start of October, on disappointing September quarter results and a pricing war.

The 30-share BSE index <.BSESN> closed up 0.95 percent, or 151.77 points, at 16,063.90, after falling as much as 2.2 percent earlier in the day. Twenty-three of its components gained.

The sentiment was also helped after data from the finance ministry showed April-October direct tax receipts rose 3.9 percent from a year earlier to 1.73 trillion rupees ($36.8 billion). [ID:nBMB009023]

R. Ganesh, director of Systematix Shares, said investors were returning to beaten down sectors and predicted the market to pull ahead.

"Some consolidation is not ruled out from here, but the medium to long-term outlook is definitely bullish," he said.

The stock market has been volatile in recent sessions, with the benchmark index rising 3.3 percent on Wednesday after falling 8.4 percent over six sessions.

Energy giant Reliance Industries <RELI.BO> closed 1 percent higher at 1,939.80 rupees, as the hearing in its gas dispute with Reliance Natural Resources <RENR.BO> resumed.

One of the judges had withdrawn from the Supreme Court hearing on Wednesday, citing potential conflict of interest. [ID:nBOM398293]

The country's second-largest outsourcer, Infosys Technologies <INFY.BO>, closed 0.7 percent lower at 2,223.10 rupees after its chairman's wife sold company shares worth $92 million for setting up a venture capital fund. [ID:nBOM241695]

Sudha Murthy, wife Infosys co-founder and chief mentor N.R. Narayana Murthy, sold 2 million shares, or about 22 percent of her total holding.

Engineering and construction firm Larsen & Toubro <LART.BO> shed 0.3 percent to 1,542.25 rupees after The Financial Express reported its outsourcing unit was in talks to buy a majority stake in Patni Computer Systems <PTNI.BO>. [ID:nBOM460442]

Patni Computer jumped 8.2 percent to 494.50 rupees.

In the broader market, gainers more than doubled the number of losers on relatively moderate volume of 399 million shares.

The 50-share NSE index <.NSEI> closed 1.2 percent higher at 4,765.55.

STOCKS THAT MOVED

* Maytas Infra <MAIL.BO> rose by daily limit of 5 percent to 149.45 rupees after it got a contract worth 7.9 billion rupees from IL&FS Transportation Networks to build a part of a four-lane highway in the western state of Maharashtra. [ID:nBMB009020]

* Oil explorer Cairn India <CAIL.BO> rose 2.1 percent to 270.55 rupees, after the unit of UK firm Cairn Energy <CNE.L> said it had reached a deal to supply crude oil from its field in western India to Reliance Industries. [ID:nBOM179799]

MAIN TOP 3 BY VOLUME

* Suzlon Energy <SUZL.BO> on 29.5 million shares

* IFCI <IFCI.BO> on 24.9 million shares

* Unitech <UNTE.BO> on 17.8 million shares

FACTORS TO WATCH * For technical analysis double click on www.reutersindia.net * India rupee report [INR/] * India bond report [IN/] * Dollar, yen gain as focus turns to ECB, BoE [FRX/] * Oil down towards $79 on weak equities, firmer dlr [O/R] * World stocks slide after Fed, ahead of ECB [MKTS/GLOB] * Futures point to lower open for Wall St. shares [.N] * For closing rates of Indian ADRs <INADR>