Indian shares rose modestly on Wednesday on expectations the government will look at fresh reform initiatives after Prime Minister Dr. Manmohan Singh took charge of the finance ministry following the resignation of UPA's Presidential candidate Pranab Mukherjee.
As part of efforts to put together a unified mechanism for the ministry and in order to spur growth, Singh has called a meeting of all top officials of the finance ministry today followed by another one-to-one meeting in the next two days with C Rangarajan, chairman of the Prime Minister's Economic Advisory Council, reports said.
The outcome of these meetings will decide whether reform is in the air to revive India's growth story. Reining in the fiscal deficit, assurances that the tax department will not use the retrospective amendments to the income tax act, a soft stance on the Vodafone tax issue case and remedial measures to curb food inflation by addressing supply side bottlenecks are some important developments that investors are looking forward to.
Global cues also offered some support, with stocks rising modestly across Asia and Europe, although the undertone remained weak ahead of a critical European summit starting Thursday. With Germany staunchly opposing joint liability among eurozone member states to share the region's debt burden, expectations for the European meeting remain low.
China's official news agency Xinhua reported that the Dragon Nation seeks to promote the offshore yuan market in Hong Kong and improve overseas investment as part of a package announced to boost economic relations. The news helped offset eurozone worries to some extent.
With F&O expiry slated for tomorrow, the benchmark 30-share Sensex moved in a narrow range of 16,931-17,029 before ending up 61 points or 0.36 percent at 16,968, with 22 of its components advancing. The broader Nifty index rose by 21 points or 0.41 percent to 5,142, while the BSE mid-cap and small-cap indexes added 0.4 percent and 0.3 percent, respectively.
Tata Steel rose 2.5 percent after an announcement that it may delay restart of its blast furnace at Port Talbot. Reliance Infrastructure advanced 1.8 percent and Tata Power added 2.3 percent following a steep hike in Delhi power tariffs.
Sterlite Industries rose 1.8 percent and Sesa Goa climbed 3.4 percent after their shareholders approved a merger proposal between the companies. Drugmaker Sun Pharma, aluminum maker Hindalco, state-run miner Coal India and software companies such as TCS and Infosys all ended up more than a percent each.
Gateway Distriparks rallied 2.8 percent after Morgan Stanley Asia (Singapore) PTE bought around 950000 shares or about a percent stake of the logistics firm through bulk deals on the BSE. Manappuram Finance soared almost 10 percent, extending its rally for a fourth straight session.
Automakers ended subdued on concerns that sales growth in June will remain tepid. Tata Motors tumbled 3.1 percent, while Mahindra & Mahindra eased 0.3 percent.
Telecom major Bharti Airtel fell 0.4 percent, energy giant Reliance Industries edged down 0.1 percent and Jindal Steel ended little changed. State-run lender SBI slipped 0.1 percent after investment bank Morgan Stanley maintained its 'underperform' rating on the stock.
Kingfisher Airlines plunged 8 percent after reports said lessors have taken back 34 aircraft in the past few weeks due to non-payment of lease rentals. No-frills airline SpiceJet lost 1.3 percent on stake sale reports.
Kotak Mahindra Bank fell 1.3 percent after the Reserve Bank of India asked its promoters to dilute their stake in the bank, currently at 45.21 percent to 20 percent in about six years.
State-run oil-retailers such as BPCL, HPCL and IOC posted modest losses on reports that petrol prices could be reduced by up to Rs.4 per litre from July.
by RTT Staff Writer
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