BSE Sensex bounces 1.8 pct; rise 6.5 pct in Nov

People walk pass the Bombay Stock Exchange (BSE) building displaying India&...

The BSE Sensex rebounded 1.8 percent on Monday as investors gave a thumbs up to better-than-expected September quarter GDP data and on a rise in Asia markets as concerns over Dubai's credit woes eased.

The gain helped the 30-share main index end November up 6.5 percent, erasing most of a 7.2 percent fall in October, which was its weakest monthly performance in 2009.

Banks climbed as most were not likely to see a material impact from Dubai's debt woes, and as higher than expected GDP data affirmed a better economic outlook, dealers said.

Top private lender ICICI Bank climbed 1.5 percent while smaller rival HDFC Bank firmed 0.5 percent.

"The GDP data positively surprised the market. Also, the realisation that we will not be really hurt by Dubai crisis helped," said Rajen Shah, chief investment officer at Angel

Broking.

Asia's third-largest economy grew by 7.9 percent in the quarter through September from a year earlier, data showed, shattering forecasts as stimulus measures boosted demand and manufacturing activity surged.

The 30-share Sensex closed 1.8 percent or 294.21 points higher at 16,926.22, with 26 of its components advancing. It rose as much as 2.4 percent in the day.

World equities generally steadied on Monday as the United Arab Emirates shored up its banks after last week's shock.

"Though market is more than fairly priced, liquidity flow will continue to help the market," said Shah.

The main index has rallied more than 75 percent in 2009, fuelled by foreign fund inflow which exceeded $15 billion.

IT bellwether Infosys Technologies rose 2.4 percent, after falling 4.3 percent over the past two sessions, and larger rival Tata Consultancy climbed 2.3 percent, after declining 4.5 percent over Thursday and Friday.

"IT stocks had fallen a lot last last week. Since the sector outlook is positive, it led to some bottom-fishing in counters like Infosys and TCS," said K. K. Mital, head of portfolio management services at Globe Capital

Dealers said there was also fund buying in the telecoms sector, where shares have fallen sharply in recent months as a pricing war has erupted.

Top mobile operator Bharti Airtel rose 5.7 percent, second-ranked Reliance Communications rose 3 percent and Idea Cellular rose 4.1 percent respectively.

Top vehicles maker Tata Motors raced 5 percent percent as higher GDP data pointed consumer spending would pick up, and after the company reported a return to operating profit for its British Jaguar Land Rover unit.

"In view of the sequential increase in JLR's volumes and improvement in the company's core domestic business, we reiterate our rating of moderate outperform on Tata Motors," First Global said in a note.

Metals stocks were shining on a good outlook for prices and expectations of strong demand from China, said Ajay Parmar, head of institutional equities at Emkay Global.

Steel maker Tata Steel rose 5.6 percent, copper producer Sterlite Industries rose 3.4 percent and aluminium producer Hindalco was up 4.1 percent.

In the broader market, gainers led losers in a ratio of 2.8:1 in a relatively lower volume of 334 million shares.

The 50-share NSE index closed 1.8 percent higher at 5,032.70.

STOCKS THAT MOVED

* Larsen & Toubro climbed 1.7 percent to 1,614.15 rupees on better GDP data and after it and state-owned Nuclear Power Corp announced a 17.25 billion rupee joint venture to make forgings.

* Vehicles maker Eicher Motors rose 4.4 percent to 568.85 rupees. A senior official said it hopes to sell up to 50,000 Royal Enfield motorcycles during the year to December, up from 43,000 last year.

MAIN TOP 3 BY VOLUME

* Suzlon Energy on 22.7 million shares

* IFCI on 16.2 million shares

* Unitech on 11.5 million shares

(For more news on Reuters Money visit http://www.reutersmoney.in)

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