Indian shares reversed early losses to end modestly higher on Tuesday after Oil Minister S Jaipal Reddy said that an increase in diesel, cooking gas and kerosene price was "unavoidable".
However, reports released after market hours said that a meeting of the Cabinet Committee on political affairs, which could have decided on fuel price hike, was postponed due to pressure from Trinamool Congress and other allies. It remains to be seen how the markets will react to this news tomorrow.
It is worth mentioning here that foreign institutional investors have been continuously buying equities in the cash segment despite the macroeconomic concerns and no movement on reforms. According to provisional data released by BSE, foreign institutional investors bought shares worth Rs.423.59 crore on a net basis today, while domestic financial institutions offloaded shares worth Rs.365.80 crore.
Extending gains for a fifth consecutive session, the benchmark BSE Sensex ended the session up 86 points or about half a percent at a three-week high of 17,853, with 17 of its components advancing. The broader Nifty index rose by 27 points or half a percent to 5,390, while the BSE mid-cap and small-cap indexes closed up 0.3 percent and 0.6 percent, respectively.
State-owned oil retailers BPCL and HPCL rallied 2-3 percent and oil explorer ONGC posted a modest 0.1 percent gain on hopes an increases in fuel prices would reduce rising under-recoveries.
Financials were also in focus, with HDFC Bank up 0.4 percent, ICICI Bank gaining 1.2 percent and mortgage lender HDFC rallying 2.5 percent as optimism that the government will step up fiscal reforms spurred hopes of a CRR cut.
Among other prominent gainers, Hindalco, ITC, TCS, BHEL, Gail India and NTPC rose 1-2 percent. Infosys rose 0.7 percent after its BPO arm, McCamish Systems, bought Marsh BPO, the business process outsourcing arm of the U.S.-based Marsh & McLennan Companies, for an undisclosed amount.
Panacea Biotec hit the 20 percent upper circuit limit for a second day in a row after the company entered into a strategic alliance with Osmotica Pharmaceutical to develop and market products in various global markets.
Among those that fell, shares of Sterlite Industries and Sesa Goa tumbled 4-6 percent after Goa temporarily suspended mining activities in the state, effective Tuesday, pending verification of documents relating to mining activity and environmental clearances. Jindal Steel fell over 3 percent amid allegations the company has benefited the most from coal block allocations.
Shares of two-wheeler manufacturer Hero MotoCorp lost a percent on reports it has lowered production due to lack of demand following a weak monsoon. Tata Steel, Hindustan Unilever and Larsen & Toubro fell about half a percent each.
On the global front, Asian markets turned in a mixed performance ahead of Fed meeting, while European stocks were in negative territory amid concerns that the European Central Bank's bond-buying plan might be jeopardized by a court ruling in Germany on the legality of the European Stability Mechanism.
by RTT Staff Writer
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