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Mumbai: India's main stock index rebounded 1.7 per cent yesterday, led by Reliance Industries, after a rise in European equities helped shake off shaky sentiment.
But traders said they were uncertain about the outlook because of choppy markets and the losses over the past few weeks, when US recession worries and risk aversion have been big concerns.
"The market has become fragile. So we may not see a sustained recovery even if there's good news," said Gajendra Nagpal, CEO at Unicon Financial in New Delhi."
The 30-share BSE index rose 1.74 per cent, or 301.50 points, to 17,650.57, with 26 components rising. It had opened up one per cent before weakening as much as 1.2 per cent at one stage before pulling back.
Petrochemicals maker and refiner Reliance Industries, which accounts for about 15 per cent of the main index, added five per cent to Rs2,551.70 on strong buying by institutional investors, one trader said.
Shares in Reliance Power rose 8.1 per cent to its highest close at Rs450.40 after the utility announced a three-for-five bonus share issue to make up for a miserable market debut after a record $3 billion initial public offer.
But HDFC Bank, which offered $2.4 billion in shares for smaller Centurion Bank of Punjab in the biggest takeover in Indian banking, disappointed the market with some analysts saying that it would not have immediate benefits.
HDFC Bank's shares fell 3.5 per cent to Rs1,422.70 and Centurion Bank shares fell as much as 14.5 per cent as the prices adjusted to the deal.
In the broader market, losers led gainers 1,602 to 1,061 on volume of 286.1 million shares. The 50-share NSE index added 1.76 per cent to 5,200.70.
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