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Indian markets move up, seen rising more

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CIOL Bureau
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By Anantharaman Muralikumar



MUMBAI: Analysts predicted further gains next week after Indian shares
rallied for the second day on Friday, buoyed by the government's commitment to

reforms and heavy foreign fund purchases.

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The bellwether 30-share index of the Bombay Stock Exchange (BSE) gained three

percent on top of its five percent jump on Thursday.

The index hit a high of 4,731.94 on Friday - up 15 percent from a 10-month

low of 4,109.66 on Wednesday - before retreating to end at 4,693.88, a gain of

139.96 points from the previous close.

"We are some way above the support level of 4,600 and I think 5,000

should be a target to look at early next week," said Arun Kejriwal, head

dealer at Nikko Stock Broker.

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The government's announcement of tax breaks for the software and

pharmaceuticals sectors on Wednesday reversed sentiment battered by volatile

global markets and concerns over valuations in technology stocks, analysts said.

Sentiment received a further boost when the Indian parliament approved the

2000/2001 budget (April-March) proposals on Thursday that included

politically-sensitive cuts in subsidies, demonstrating the government's

commitment to reforms.

"A mix of short-covering and heavy value-based foreign fund buying was

witnessed on Friday," said Hiten Sampat, vice-president of equities at

Parag Parikh Securities Ltd.

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Foreign funds have net equity purchases of $41 million in the May 2-4 period,

figures from the market regulator showed.

Technology shares and select heavyweights led the gains on Friday with as

many as 16 of the 34 leading software shares ending either limit-up 12 percent

or close to it. The BSE information technology index of 33 leading sector stocks

gained 7.76 percent or 293.38 points to 4,072.39.

Sector leader and index heavyweight Infosys Technologies ended up 4.01

percent at 8,5O0 rupees ($194.8) while Satyam Computer gained 12 percent to

3,274.05 rupees. The two delivered nearly 40 per cent of the BSE 30-share

index's gain.

But, the single biggest contribution came from Hindustan Lever Ltd, a

subsidiary of Unilever Plc, which ended 5.4 percent higher at 2,540 rupees,

boosted by its parent's bid for U.S. group Bestfoods and accounted for 26

percent of the index's rise.

(C) Reuters Limited 2000.

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