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Indian shares likely to extend recovery

BOMBAY: The recovery in Indian shares is likely to strengthen this week, boosted by the return of technology stocks to buy lists and an easing of fiscal year-end selling pressure, analysts said.

After five consecutive weeks of losses that saw the bellwether 30-share index of the Bombay Stock Exchange (BSE) fall 14 percent from an all-time closing high of 5,933.56 on February 11, shares gained modestly last week.

The BSE index gained 39 points or 0.76 percent to end Friday at 5,141.42.

"The markets should be good this week. Some shares have come off so much in recent times they appear undervalued and outstanding positions too have fallen," said Ajay Srinivasan, managing director of Prudential ICICI Asset Management Company.

He said momentum shares like Infosys Technologies Ltd and Zee Telefilms Ltd had risen towards the end of the week which augured well for the market.

Software leader Infosys gained almost 20 percent last week to end Friday at 10,673.15 on the BSE, while media and television company Zee rose 13.50 percent in the last two days after falling 28 percent since March 14.

Infosys had fallen almost 25 percent in the previous week but rose along with other sector shares on the back of the U.S. Nasdaq's rebound.

"We will also see a build-up of positions in the software sector ahead of the release of the fourth quarter results," said the vice-president at a local brokerage.

Analysts said with the last settlement at the BSE for the fiscal year to March 31, 2000 ending last Friday, selling pressure by many investors to balance their books would ease.

They said the stock markets had also cooled down with outstanding positions on the BSE dipping to 31.67 billion rupees by last Thursday from almost 50 billion a month ago.

"Pharmaceutical stocks like Hoechst Marion and SmithKline Pharmaceuticals and shares of fast-moving consumer goods sector are attractive," said Prudential ICICI's Srinivasan.

"But I'm less bullish on economy-related sectors as people are looking at a more sustained economic recovery model."-Reuters