Continued expectations of government action to revive domestic growth helped Indian shares shrug off weak global cues on Thursday. Notwithstanding diminishing EU summit hopes and the F&O expiry, the benchmark BSE Sensex ended a volatile session up 23 points or 0.14 percent at 16,991, with 15 of its components advancing. FMCG, power, IT and metal stocks were on buyers' radar, while oil/gas, banking and consumer durable stocks ended subdued.
The rupee also traded firm, bolstered by dollar selling by banks and exporters after Prime Minister Manmohan Singh, who is also acting as finance minister following Pranab Mukherjee's resignation, sought to give a big push to the sagging economy.
At a meeting of economic advisers and top finance ministry officials on Wednesday, Singh spoke about various steps to revive economic growth, including steps to turn around the fortunes of the mutual fund and insurance sectors, media reports said, helping stocks finish on a positive note.
In the meantime, investors overlooked news from the India Meteorological Department (IMD) that India's South-West monsoon rains were 18 percent below average in the week to June 27.
The broader Nifty index rose by 7 points or 0.14 percent to 5,149, while the BSE mid-cap and small-cap indexes added 0.1 percent and 0.2 percent, respectively.
Tata Power rose 1.3 percent, extending gains for a third consecutive session following electricity tariff hike in the national capital. Tata Motors rose 0.4 percent, reversing steep early losses after the company said it has halted production at its Jamshedpur plant for three days to stop further piling up of inventory at the dealers end.
SBI, India's largest lender, slid 0.9 percent after slashing interest rates on loans to exporters by 50 basis points. Other major public sector banks such as Bank of India and Punjab National Bank posted modest gains despite RBI data showing sluggish growth in banks' deposits and loans in the month to June 15. Private sector lender ICICI Bank rose half a percent, while HDFC Bank eased 0.3 percent.
Axis Bank tumbled 3 percent and Yes Bank slipped 0.7 percent on reports U.K. lender HSBC has offered its entire stakes in both private sector lenders for sale. Kotak Mahindra Bank shed 0.6 percent after the RBI asked Uday Kotak, promoter of the bank, to reduce its stake n the bank to 10 percent over the next eight years.
Telecom major Reliance Communication fell 1.3 percent after reports suggested that the telecom department plans to seek communication minister Kapil Sibal's approval to impose a Rs 600-crore penalty on the company.
Elsewhere, other Asian markets turned in a mixed performance, with Chinese stocks extending declines for a seventh straight session, as cheers over encouraging economic data from the U.S. and Japan gave way to EU summit pessimism.
The major European averages such as the U.K.'s FTSE 100, the German DAX and France's CAC 40 were down between 0.9 percent and 1.5 percent after a Bank of England survey revealed lenders expect borrowing costs to rise further in the coming months.
German employment data disappointed investors, Italy's borrowing costs surged again today and the results of a series of surveys by the European Commission showed waning consumer and business confidence in the eurozone region, further weakening appetite for riskier assets ahead of the two-day EU summit in Brussels starting tonight.
by RTT Staff Writer
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