Sensex records best weekly rise in 11 weeks

The Bombay Stock Exchange’s (BSE) Sensex climbed 0.9% on Friday to its best weekly gain in 11 weeks, led by banks and outsourcers, and supported by
rising foreign portfolio investment. The 30-share BSE index rose 4.5% on the week, taking gains this month to 6%, after sliding 7.2% in October, which was its worst performance in a year. “The rally is driven by liquidity, which is fuelled by dollar weakness,” said Manish Sonthalia, portfolio management services manager at Motilal Oswal. Foreign funds have moved $14.8 billion into Indian stocks this year, lifting the Sensex nearly 75%. In 2008, they had pulled out more than $13 billion and the benchmark fell over half. Private lenders ICICI Bank and HDFC Bank were among the gainers on hopes rising industrial activity would boost demand for loans and the long-term outlook. “We expect bank credit growth to rise to 16% year-on-year by March 2010,” Morgan Stanley said, adding it would accelerate to 22% by end-2010 as capital expenditure also begins to recover next year. The Sensex closed up 0.92%, or 152.80 points, at 16,848.83. Twenty-five of its components advanced. ICICI Bank and HDFC Bank rose 1.6% and 0.4%, respectively, while SBI gained 0.1%. Export-focused software services companies climbed as the sector outlook was positive, with orders set to rise and hiring plans picking up, R Ganesh, director of Systematix Shares, said. Bellwether Infosys Technologies rose 1.5% to Rs 2,358.80. Sector leader Tata Consultancy Services added 2.5% to Rs 670.20 and Wipro firmed 1.2% to Rs 632.70. State-owned oil and gas producer Oil & Natural Gas Corporation (ONGC) rose 3.1% to Rs 1,183.50 on market talk the oil ministry had proposed a hike in gas prices. Engineering and construction firm Larsen & Toubro (L&T) gained 0.2% to Rs 1,643.55, after sources said it sold a third of its holding in outsourcer Mahindra Satyam for about $66 million. In the broader market, losers almost matched the number of gainers on relatively moderate volume of 423 million shares.The broader 50-share NSE index closed 0.9% higher at 4,998.95.