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Indian Shares End Higher For Second Day

Indian shares ended higher for a second consecutive session on Monday, as the Reserve Bank of India's surprise move last week to inject additional liquidity into the system continued to buoy demand for bank stocks.

ICICI Bank, India's largest private sector lender, rose 0.4 percent, rival HDFC Bank gained 1.4 percent and Axis Bank ended up 0.8 percent. State-run State Bank of India advanced 1.6 percent after its board approved the issuance and allotment of 3.60 crore equity shares to the government on a preferential basis.

Allahabad Bank, Bank of India and IOB all rose more than a percent each after they allotted shares on a preferential basis to state-run insurer Life Insurance Corporation of India. Yes Bank rose 1.3 percent after the lender raised Rs 380 crore in debt from International Finance Corp.

The benchmark 30-share Sensex moved in the range of 17,382-17,530 before paring some gains and ending up 74 points or 0.42 percent at 17,478, with 19 of its components advancing. Investors, meanwhile, shrugged off a report that showed India's manufacturing sector grew at the slowest pace in three months in March.

DLF, NTPC, TCS, Larsen & Toubro, Mahindra & Mahindra, SBI, HDFC Bank, BHEL, Cipla and HDFC led the gainers, with gains ranging between 1 percent and 3 percent, while Bharti Airtel, Hindalco, Sterlite Industries and Maruti Suzuki fell more than a percent each. Shares of Reliance Industries, India's largest company by market capitalization, ended down a percent.

The broader Nifty index rose by 22 points or 0.42 percent to 5,318, while the BSE mid-cap and small-cap indexes ended up 1.1 percent and 1.7 percent, respectively.

Tata Motors, India's largest automaker, rose 0.3 percent and utility vehicles manufacturer Mahindra & Mahindra gained 1.7 percent after they announced robust vehicle sales for March. Maruti Suzuki fell 0.9 percent as the carmaker reported lower than expected sales.

Bajaj Auto led the decliners in the Sensex pack, with the stock falling 1.5 percent, on fears that a sharp hike in duties on auto imports by Sri Lanka would hurt its exports to the island nation.

Metal stocks such as Sterlite and Hindalco Industries fell 1.3 percent and 1.4 percent, respectively and steelmaker Jindal Steel lost half a percent, as a mixed bag of economic data from the U.S, Europe and elsewhere across Asia sent mixed signals about the global economic outlook. Coal India declined 0.7 percent, as TCI, which holds over one percent in Coal India, said it would launch legal action against the company.

Kingfisher Airlines plunged almost 9 percent as its employees said they will protest against non-payment of salaries. Rival Jet Airways and SpiceJet ended up 0.8 percent and 2.8 percent, respectively, notwithstanding another hike in jet fuel prices by about 3 percent.

Oil retailers such as BPCL, HPCL and IOC ended subdued, with losses ranging between 0.6 percent and 2 percent, as the government postponed a decision on announcing a petrol price hike. Ranbaxy Laboratories fell 2.6 percent on profit taking after rallying 14 percent in the past five sessions.

Reliance Power climbed 4.6 percent. The Anil Ambani-controlled firm said it has commissioned the fourth 300 MW unit of its Rosa plant at Shahjahanpur in Uttar Pradesh, taking the project's total operational capacity to 1200 MW. ACC lost a percent, while Ambuja Cements added 0.6 percent after they reported cement sales data for March.

Non-banking finance companies, which provide finance to power projects, gained ground after the Tamil Nadu Electricity Regulatory Commission approved a 37 percent tariff hike, covering both domestic and industry sectors. Shares of Rural Electrification Corporation and Power Finance Corporation rallied around 5 percent each, while PTC India soared 9.8 percent.

IVRCL soared 5.1 percent on bagging two prestigious projects worth Rs 4,081 crore. Titan Industries jumped 6.2 percent on reports the government has allowed the company to import gold directly from overseas market.

On the global front, other Asian markets turned in a mixed performance and European shares erased early gains, as manufacturing data from China offered a mixed snapshot of the nation's economy and investors adopted a cautious approach ahead of holidays this week.

An official survey of Chinese manufacturing released on Sunday showed manufacturing activity gained momentum in March, with the corresponding PMI rising 2.1 points to 53.1 in the month, up from February's 51.0 and January's 50.5, helping dispel lingering fears of a Chinese hard landing.

In contrast, the HSBC's flash manufacturing, the unofficial reading of China's PMI which tends to reflect trends in the export sector more strongly than the official index, showed manufacturing contracting and export orders falling. The Chinese market was closed for a three-day public holiday beginning today.

by RTT Staff Writer

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