Friday, 08 August 2008 STOCKS Sensex Rallies To Highest Close In 8 Weeks Indian shares rallied late on Friday to their highest close in almost eight weeks, but trade was choppy after inflation topped 12 percent for the first time in 13 years and raised more monetary tightening worries. The main index rose 0.3 percent and notched a fifth weekly gain in a row, registering its best run this year. But traders said the outlook was uncertain and would depend upon global factors such as oil prices, credit crisis fallout and U.S. economic woes. "Market drew comfort from cooling oil prices and staged an upward move towards close but concerns on inflation still remain," K K Mital, head of portfolio management Services at Globe Capital, said. The 30-share BSE index rose 0.33 percent, or 50.57 points, to 15,167.82, with half its components gaining. It firmed 3.5 percent in the week but is down a quarter in 2008. The benchmark spent most of the day in negative territory, falling as low as 14,888.12 at one stage after analysts said late on Thursday inflation was yet to peak and the central bank was not done with monetary tightening as the wholesale price index rose 12.01 percent in the 12 months to July 26. Traders said the market got a boost after oil fell below $118 a barrel, easing the threat of further rate hikes immediately. No. 2 lender ICICI Bank rose 2.9 percent to 728.90 rupees taking gains in the week to 13.5 percent. HDFC Bank climbed 2.1 percent to 1,280.20 and the sector index climbed 1.5 percent. But shares in software services companies fell on concerns of weaker outsourcing prospects in the United States, their biggest market, after insurer American International Group posted a big loss. Bellwether Infosys Technologies fell 2.4 percent to Rs 1,679.85 and No. 4 Satyam Computer Services dropped 1.8 percent to Rs 409. Top listed firm Reliance Industries fell 0.9 percent to Rs 2,250.45 after the Economic Times newspaper said a government committee had recommended a windfall tax for private refiners to help pay for oil subsidy. The paper cited the panel as saying private-sector oil producers such as Reliance will have to part with half their revenue above $75 a barrel to help keep retail price of fuel low. Shares in state-run explorer Oil and Natural Gas Corp rose 4 percent to Rs 1,064, to its highest close since March 28. It along with state-run gas transporter GAIL has been taking up about a third of the subsidy burden. In the broader market, losers led gainers 1,408 to 1,317 on volume of 339 million shares. Brokerage India Infoline advised clients to remain cautious, as the choppiness indicated the market was uncertain over the near-term direction. The broader 50-share NSE index rose 0.12 percent to 4,529.50. Elsewhere in the region, Karachi's 100-share index rose 2.1 percent to 9,909.45 and Colombo's All-Share index eked out a gain of 0.04 percent to 2,466.56. Stocks That Moved * Shares of fertiliser producers such as Tata Chemicals, Chambal Fertilisers & Chemicals and Nagarjuna Fertilizers & Chemicals rose 2.8-6.5 percent after the government approved an investment policy for urea, linking cost of production to the import parity price, a key demand of the industry. * Shanthi Gears jumped 9.4 percent to Rs 73.75 on a newspaper report wind turbine maker Suzlon Energy's Belgian unit may buy at least half the founders' stake. * Mining firms Sesa Goa and Ashapura Minechem rose more than 6 percent each after the cabinet approved a new policy on uranium exploration. Main Top 3 By Volume * Reliance Natural Resources Ltd on 28.8 million shares * Chambal Fertilisers & Chemicals Ltd on 16.2 million shares * Nagarjuna Fertilisers & Chemicals Ltd on 13.4 million shares (Reuters)   Articles Blogs Conversations Placements Events