A strong rally in banks helped Indian shares end higher for a fourth consecutive session a day before the Reserve Bank of India reviews its monetary policy. SBI, IDBI Bank, ICICI Bank, Axis Bank, Bank of India, Yes Bank and PNB rose 1-6 percent.
Reversing the declining trend of the past five months, India's WPI Inflation rose to 6.95 percent in February, government data released today showed, dampening hopes of a rate cut to a certain extent.
However, some analysts still believe that the central bank would look at a 25 bps repo cut tomorrow to signal banks to cut their lending rates. Finance Minister Pranab Mukherjee expressed the hope that the rate of price rise will come down to 6.5 percent by March-end.
Meanwhile, Railway Minister Dinesh Trivedi, who presented his maiden budget today, hiked fares for the first time since eight years saying the hike was imperative in view of the increase in fuel prices.
The benchmark 30-share Sensex finished a range-bound session 106 points or 0.59 percent higher at 17,919, with 20 of its components advancing.
Software services exporter TCS led the decliners with a 3.6 percent loss on muted expectations for the fourth quarter. Rival Wipro lost 1.4 percent following an equity stake sale through the auction route.
Metal stocks such as Tata Steel and Jindal Steel fell around a percent each, two-wheeler maker Bajaj Auto shed 0.9 percent, property developer DLF lost 0.9 percent, mortgage lender HDFC slipped 0.6 percent and market heavyweight Reliance Industries ended half a percent lower.
The 50-share Nifty index climbed 34 points or 0.63 percent to 5,464 and the BSE mid-cap index rose 0.3 percent, while the small-cap index shed 0.3 percent.
Besides banks, NTPC, Larsen & Toubro, ONGC, Tata Motors, Hindalco, Mahindra & Mahindra and Coal India were among the prominent gainers in the Sensex pack. Shares of Patni Computer Systems soared 7.1 percent after announcing the schedule for its share buyback plan.
Railway-related stocks lost ground post the announcement of the Railway Budget. Kalindee Rail plunged 6.6 percent, Kernex Microsystems slumped 5.2 percent and Titagarh Wagons tumbled 4.3 percent.
Beleaguered Kingfisher Airlines fell 3.4 percent on reports that it has scaled back overseas flights in an attempt to cut costs and attract funding from private equity investors.
Unitech shed 0.8 percent after the Company Law Board asked the real estate firm to decide by Monday if it wanted to buy its joint venture partner Telenor's 67 per cent stake in telecom company Uninor or sell its 33 percent stake to the Norwegian firm.
Elsewhere in Asia, key benchmark indexes in Australia, South Korea and Japan rose between 0.9 percent and 1.5 percent, with financials spearheading the liquidity-driven rally, as positive U.S. retail sales data and the Federal Reserve's upbeat assessment of the world's largest economy bolstered the global economic outlook.
Favorable stress test results for a number of major U.S. banks and JPMorgan's unexpected dividend hike and stock buyback also helped improve investor appetite for risk. Most U.S. top banks passed their annual stress tests and are in a strong position to weather another recession, the Fed said in a conservative report that underscored the recovery of the financial sector.
European shares were firmly in positive territory in early trading after Fitch Ratings upgraded Greece's long-term foreign and local currency debt ratings to B- with 'stable' outlook from 'Restricted Default', saying the distressed debt exchange with the private creditors has significantly improved the country's debt service profile.
by RTT Staff Writer
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