Indian shares rose for the third straight day on Tuesday, as better-than-expected US manufacturing and China's non-manufacturing PMI data eased concerns about economic outlook and investors continued to pin hopes on interest rate cuts during the monetary policy meeting slated for this month.
With the central bank playing a more pro-active role in addressing the liquidity concerns, many economists and analysts still believe that there is a likelihood of a token rate cut in the upcoming policy meeting on April 17.
The rupee hit a two-week high today, as foreign funds continued to pour money into stocks despite the recent confusion over the General Anti-Avoidance Rules (GAAR).
The benchmark 30-share Sensex moved in a limited range before ending 120 points or 0.68 percent higher at 17,597, with 21 of its components advancing. The broader Nifty index rose by 41 points or 0.76 percent to 5,359, while the BSE mid-cap and small-cap indexes ended up 0.95 percent and 1.14 percent, respectively. Consumer durable, capital goods, oil/gas, metal and banking shares led the upmove.
Metal stocks were in the limelight, with Tata Steel, SAIL, Sesa Goa, Sterlite and Hindalco rising 1-3 percent, as fears of a possible "hard landing" in China receded.
Banks such as SBI and ICICI Bank rose around 2 percent each and HDFC Bank gained half a percent on growing expectations for a rate cut in the upcoming policy meeting.
BHEL rose 1.5 percent after the power-equipment major reported a 14 percent rise in provisional 2011/12 net profit, beating estimates. Also, the company announced that it would withdraw the draft red herring prospectus filed with market regulator SEBI in September for its follow-on-public offering.
Engineering & construction giant Larsen & Toubro gained 1.9 percent, energy giant Reliance Industries added 1.6 percent, Tata Motors, India's largest automaker, rose 1.3 percent, state-run oil explorer ONGC gained 1.2 percent and mortgage lender HDFC ended up a percent.
Property developers such as Godrej Properties, HDIL and Unitech rose 1-3 percent after some banks cut interest rates on home loans for new borrowers.
Among healthcare stocks, Ranbaxy Laboratories rose 1.5 percent as the drug maker resumed exports of its generic version of blockbuster cholesterol drug Lipitor from its Mohali manufacturing facility.
Suven Life Sciences soared 9.2 percent after the pharmaceutical firm said it has received four product patents in China and Korea for its new chemical entities. Glenmark Pharmaceuticals added 1.3 percent after receiving the U.S. FDA approval to sell Desogestrel and Ethinyl Estradiol tablets in the American market.
Shares of beleaguered airline Kingfisher jumped 10.3 percent after its employees withdrew a planned agitation over delayed salaries. Rival SpiceJet soared 6.8 percent amid reports that it will likely use Reliance Industries' services and infrastructure to import jet fuel.
Vedanta Group firm Cairn India climbed 4.7 percent as oil prices rebounded 2 percent overnight and UBS upgraded the stock to "buy" from "neutral." Steel Strips Wheels rose almost 2 percent after the auto component firm said it achieved net sales of steel wheel rims of Rs.91.80 crore in March, up 21 percent compared to March 2011.
On the losing side, Hero MotoCorp fell 2.3 percent as the two-wheeler manufacturer reported lower than expected auto sales in March. Software services exporter TCS lost a percent after a U.S. court granted approval for a class action lawsuit against the company over a wage dispute. Bajaj Auto edged down 0.4 percent after the two and three wheeler manufacturer reported a 9 percent rise in March vehicle sales.
Maruti Suzuki fell 2.1 percent, Sun Pharma and Bharti Airtel lost around a percent each, Hindustan Unilever shed half a percent, DLF edged down 0.1 percent and Mahindra & Mahindra slipped 0.1 percent. Alstom T & D India fell 1.5 percent despite winning a Rs.150-crore contract from Power Grid Corporation of India.
Elsewhere across Asia, key benchmark indexes in Australia, South Korea and Hong Kong rose between 0.2 percent and 1.3 percent as upbeat economic data from China and the United States eased worries over global economic growth.
A day after China's official PMI showed a surprise surge in manufacturing activity, data released today showed expansion in the nation's non-manufacturing sector as well, with the corresponding PMI climbing to a six-month high of 58 in March from 48.4 in the previous month
Trading volumes, however, continued to remain thin as the Chinese market was closed for a public holiday and investors awaited U.S. factory orders numbers due later in the global day, as well as Friday's employment report. Japan's Nikkei average retreated 0.6 percent, as the yen's return to strength on worries over the European economy prompted investors to take profits in export-linked shares.
Commodities such as copper and crude fell on profit taking following a 2 percent rally overnight, while the dollar fell against the yen and euro.
European shares retreated after Monday's solid advances, as caution prevailed ahead of U.S. factory orders report and monthly sales results due to be reported by automakers later in the day. Investors also eye the release of Fed minutes for cues to near-term market outlook.
by RTT Staff Writer
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