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Indian Shares Set To Extend Gains

4/17/2012 11:17 PM ET

Indian shares are seen opening higher on Wednesday, mirroring firm Asian cues as a successful Spanish bond auction eased concerns over the eurozone debt crisis and the International Monetary Fund raised its global growth projections for this year and next, citing improvements in the U.S. economy and emerging economies.

Spain sold 3.2 billion euros worth of twelve and eighteen-month bills yesterday, above the target of 3 billion euros. While the yields were well above last month, the auctions attracted improved demand.

On Wall Street, stocks rose sharply overnight, as traders reacted positively to news of a successful Spanish debt auction and the latest batch of quarterly results. Meanwhile, traders largely shrugged off disappointing U.S. economic data, including a Commerce Department report showing an unexpected drop in housing starts in March and a flat reading on industrial production for a second consecutive month. The Dow ended up 1.5 percent, the tech-heavy Nasdaq climbed 1.8 percent and the S&P 500 added 1.6 percent.

Closer home, shares rallied on Tuesday, with benchmark indexes Sensex and the Nifty climbing around 1.2 percent each, after the Reserve Bank of India cut interest rates for the first time in three years. The central bank slashed its repo rate by an unexpected sharp 50 basis points to ease the liquidity crunch in the money markets and support faltering economic growth. Economists were expecting a quarter point reduction.

Provisional data released by BSE shows that foreign institutional investors bought shares worth Rs.441.15 crore on a net basis yesterday, while domestic financial institutions sold shares to the extent of Rs.213.21 crore.

by RTT Staff Writer

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