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Indian Shares Extend Gains To One-month High

Indian shares extended gains for a fourth straight session, led by oil/gas, FMCG and metal stocks on optimism the Indian economy has bottomed out in the December quarter. Banking stocks also rose sharply on expectations the Reserve Bank of India will cut interest rates later this month.

Additionally, market regulator SEBI and the enforcement directorate have not come across any instance of Participatory Notes being used for money laundering, Finance Minister P Chidambaram said in a written reply in the Lok Sabha, boosting hopes of robust capital inflows in the coming months. Participatory Notes are derivative instruments used by FIIs to make investments in the Indian stock markets.

Global cues remained supportive, with shares rallying across Asia and Europe as encouraging data out of the U.S., China and Japan boosted optimism the global economy is gaining traction.

The benchmark BSE Sensex rose 1.39 percent to 19,680, its highest level since February 4, while the broader Nifty index ended up 82 points or 1.41 percent at 5,946. Second-line stocks posted relatively modest gains, with the BSE mid-cap and small-cap indexes rising about 0.7 percent each.

Among the prominent gainers in the Nifty pack, Kotak Mahindra Bank, Gail, BPCL, Siemens, HDFC, IDFC and Jindal Steel jumped 3-6 percent. State-run oil companies ONGC and Oil India rose 2-3 percent after the government sought Parliament approval to spend an additional Rs.49,715.54 crore mainly to meet the outgo on fuel, fertilizer and food subsidies in the current fiscal year.

Bajaj Auto gained 1.2 percent despite a brokerage downgrade. Mahindra & Mahindra rallied 2.4 percent after workers at its Nashik plant called off their strike over wage negotiations. Bharti Airtel ended 0.9 percent higher on reports it is in talks with PE firms to divest a 20-25 percent stake in its DTH business.

Sun TV Network closed up 0.4 percent on reports Kalanithi Maran, founder and chairman of the company, is in talks to sell a 2 percent stake in the company to foreign institutional investors to meet the minimum public shareholding norms for listed companies.

Maruti Suzuki India fell 1.3 percent on reports it is suspending production of petrol cars at its Gurgaon plant tomorrow in an attempt to cut inventory amid falling sales.

IT shares fell on profit taking and as the rupee extended gains to hit a more than one-week high against the dollar on increased foreign fund inflows. Infosys and Wipro lost about a percent each, while TCS shed half a percent. MCX plunged 5.4 percent on the back of a block deal on the BSE.

Elsewhere, other Asian markets rose broadly, with markets in Japan and Hong Kong leading the way, as the yen fell across the board on expectations of aggressive easing policies from the Bank of Japan and robust Chinese trade data lifted sentiment. European stocks also traded higher ahead of the U.S. non-farm payrolls report due later in the global day.

by RTTNews Staff Writer

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