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Indian Shares Snap Two-day Losing Streak

3/30/2012 7:24 AM ET

Indian shares rose sharply on Friday, rebounding from two days of losses, as gains in the rupee and the easing of benchmark bond yields in the wake of Reserve Bank of India's decision to conduct bond buybacks of up to Rs,10,000 crore bolstered sentiment.

The central bank's surprise decision to infuse money into the system via open market operations gave rise to hopes that it would announce more such bond-buying programs in the coming months to ease the liquidity crunch.

With strong infrastructure output data for February and the recent sharp decline in the prices of oil offering the market further support, the benchmark 30-share Sensex ended the day up 346 points or 2.03 percent at 17,404, while the broader Nifty index climbed 117 points or 2.25 percent to 5,296.

The indexes finished the session near their day's highs after finance minister Pranab Mukherjee said late in the afternoon that holders of participatory notes will have no tax liability in India and that the government would issue a clarification on the matter in due course of time.

Tata Steel, Maruti Suzuki, Hindalco, ICICI Bank, Reliance Industries, BHEL, Coal India and Mahindra & Mahindra were among the prominent gainers in the Sensex pack, with gains 3-4 percent. Only Jindal Steel and Sun Pharma ended in negative territory, posting modest losses. Second-line stocks also saw strong gains, with benchmark BSE mid-cap and small-cap indexes ending up more than 2 percent each.

Elsewhere across Asia, markets ended on a mixed note, with key benchmark indexes in Australia, Hong Kong, Japan and South Korea edging down slightly, as continued worries about slowing global growth tempered gains stemming from reports that Eurozone leaders will likely achieve positive results on the region's sovereign debt crisis at the upcoming Eurozone Finance Ministers' meeting in Copenhagen starting today.

European shares snapped three days of losses and the U.S. index futures pointed to a higher start on Wall Street, as investors await U.S. personal income and spending data for further clues about the state of the world's largest economy.

by RTT Staff Writer

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