Indian shares ended off their day's highs on Tuesday, although market undertone remained bullish following recent clarifications from the finance ministry on contentious tax proposals.
Benchmark indexes Sensex and the Nifty briefly dipped into the red before rebounding to close modestly higher, tracking a stronger rupee, which gained 57 paise to hit a four-week high against the dollar today on the back of improved risk appetite and speculation concerning additional stimulus measures from major central banks. Aiding sentiment further, Chief Economic Adviser Kaushik Basu said that inflation would soften from mid-October.
The benchmark 30-share BSE Sensex hit a high of 17,527 early in the session before paring gains and ending up 27 points or 0.15 percent higher at 17,426, with 16 of its components advancing. The broader Nifty index rose by 9 points or 0.18 percent to 5,288, while the BSE mid-cap and small-cap indexes gained 0.5 percent and 0.8 percent, respectively.
Consumer durable, realty, metal, oil/gas and banking stocks paced the gainers list, while FMCG stocks Hindustan Unilever and ITC fell over a percent each on concerns over a halt in the progress of monsoon rains. TCS, India's largest computer software firm, fell 1.4 percent and Infosys slid 0.2 percent after the rupee strengthened over a percent to breach the 55 mark against the dollar.
BHEL, Jindal Steel, Hero MotoCorp, Tata Steel, Tata Motor and Reliance Industries were among the other prominent decliners, with losses between 0.2 percent and 1.6 percent.
Among those that gained, telecom major Bharti Airtel rallied 3.1 percent after the Telecom Disputes Settlement and Appellate Tribunal gave a split verdict on a 3G roaming dispute. Rival Idea Cellular jumped 5.4 percent, Reliance Communication rose 2.4 percent and Tata Teleservices added a modest 0.4 percent.
Metal stocks saw considerable buying interest after copper hit a six-week high on speculation central banks will act to boost growth. Hindalco rose 2.3 percent, Coal India advanced 2 percent and Sterlite Industries gained 1.1 percent.
Mahindra & Mahindra and Maruti Suzuki extended gains for a second straight day, rising 0.4 percent and 0.9 percent, respectively, while private sector lender ICICI Bank rose 0.8 percent, state-run oil explorer ONGC advanced 1.4 percent, drugmaker Dr Reddy's Laboratories added 1.9 percent and mortgage lender HDFC closed up 2 percent. SBI edged up 0.2 percent on reports that it is preparing for a bond sale.
Reliance Capital jumped 4.5 percent after Ming Yang Wind Power inked definitive agreements with the company and its related entities forming part of the Reliance Group to co-develop a large portfolio of clean energy projects in India.
Godrej Properties climbed 3.2 percent after its real estate arm said it has created a Rs 770 crore development fund with a clutch of global investors to invest in the residential space over the next two years. Reliance Power ended on a flat note amid reports it may lose a Rs. 300-crore bank guarantee in a tariff dispute.
On the global front, stocks ended mostly higher across Asia, with Hong Kong's Hang Seng index leading the gainers with a 1.5 percent gain, as speculation grew about intervention by major central banks to spur economic growth.
With employment deteriorating in Europe, the ECB is largely expected to cut interest rates at a rate-setting meeting slated for Thursday, while the Bank of England may announce an increase in its bond-buying program to help stimulate the ailing economy. There are mixed views about whether the Bank of Japan would ease its policy further in a quarterly review next week.
As for the United States, weak manufacturing data released overnight served to ramp up expectations of Fed action to prevent the real economy from sliding into another recession.
European stocks climbed for a third day, although investors remained cautious about the outcome of central bank policy meetings on Thursday. The euro held steady against the dollar, pressured by reports that Finland and the Netherlands are threatening to block the use of Europe's new permanent bailout fund.
by RTT Staff Writer
For comments and feedback: email@example.com