Markets extend gains post ECB's rate cut; ONGC, Reliance up

Written by fe Bureau | Mumbai | Updated: Jun 6 2014, 17:25pm hrs
BSE Sensexshares inch closer to record highs, led by upstream oil and gas companies.
BSE Sensex gained 0.73 per cent, while the NSE Nifty was trading 0.61 percent higher, after the European Central Bank (ECB) cut interest rates. On Thursday, the benchmark indices closed at their lifetime highs.

The ECB on Thursday cut its main lending rate and introduced a negative deposit rate, in effect charging banks to park cash with the central bank.

The BSE benchmark soared 210.51 points to 25,230.02 in opening trade while broader NSE Nifty was up 50.10 points to 7,524.20.

Upstream oil and gas companies lead the gains, with Oil & Natural Gas Corp (ONGC) rising 3.5 percent and Reliance Industries (RIL) advancing 2.7 percent. Among other blue-chips, State Bank of India gains 1.25 percent. However, shares in Infosys fell after a senior executive quit the company.

At 11.50 am, the BSE Sensex was trading 171.99 points or 0.69 per cent up at 25,191.50.

On Thursday, benchmark indices celebrated, with the Sensex closing above its crucial psychological level of 25,000, led by metal and energy stocks. The Nifty, too, came close to the psychological barrier of 7,500.

Experts believe Indian markets can see further re-rating. "The positive election outcome coupled with a strong majority government can lead to a more business friendly environment and revival in domestic demand. This will drive earnings upgrades for Corporate India over the next few years," Motilal Oswal Financial Services said in a recent note.

Among sectoral indices, the BSE Realty (3.38%), BSE Oil & Gas (3.33%) and BSE Bankex (1.27%) were the major gainers on Friday. Among individual stocks, ONGC (6.28%), Gail (3.79%) and RIL (2.87%) were the major gainers on the 30-share Sensex.

Asian indices were showing a mixed trend. The Nikkei (0.09%), Jakarta Composite (0.34%) and Straits Times (0.49%) were trading higher. Meanwhile, Hang Seng (-0.21%), Taiwan Taiex (-0.15%), Kospi (-0.65%) and Shanghai Composite (-0.60%) were trading lower.

Asian markets turned mixed on Friday as investors offered only polite applause for the European Central Bank's latest stimulus package, while the euro went off-script in a vicious short-covering rally.

Also, foreign portfolio investors bought Indian shares worth 13.69 billion rupees ($230.8 million) on Thursday, provisional exchange data showed.

(With agency inputs)