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Indian Shares Pare Early Gains

Indian shares pared some early gains on Thursday, as a further slide in European stocks on fears over Greek banks and a fall in rupee to a new record low against the dollar, reversing initial gains, prompted traders to take some profits off the table.

The benchmark 30-share Sensex hit an intra-day high of 16,240 before paring gains and ending up 40 points or 0.25 percent higher at 16,070, with only 14 of its component advancing.

FMCG player ITC led the gainers, climbing 3.1 percent on reports that it has acquired land to set up a luxury hotel in Colombo. Energy giant Reliance Industries gained 1.5 percent amid an ongoing share buyback program.

Metal stocks like Tata Steel and Jindal Steel rose 1-2 percent, property developer DLF gained 1.7 percent, mortgage lender HDFC added 1.6 percent, state-run lender SBI gained 1.5 percent and car maker Maruti Suzuki ended up 1.3 percent. Telecom major Bharti Airtel ended flat, erasing most of its early gains, after the company announced new 3G tariffs for its customers, slashing prices by as much as 70 percent under some plans.

Among those that fell, Mahindra & Mahindra and Larsen & Toubro paced the declines, falling around 4 percent each, while ICICI Bank, Tata Power, Hndalco, BHEL, Bajaj Auto and Cipla lost 1-3 percent. Bajaj Auto fell 2.7 percent as the motorcycle maker reported a 45 percent slump in fourth-quarter profit

Sterlite Industries and Sesa Goa ended little changed with a negative bias after group company London-listed Vedanta Resources said its profit for the fiscal year 2012 was hurt by higher operating costs and increased export duty rates on iron ore.

The broader Nifty index ended up 12 points or 0.25 percent at 4,870, while the BSE mid-cap and small-cap indexes edged up marginally. The market breadth was neutral, with gaining shares nearly equaling declining shares.

Piramal Healthcare edged up marginally as it agreed to buy U.S.-based Decision Resources Group for around Rs.3,400 crore, marking its entry into the healthcare information management space. IDBI Bank tumbled 2.9 percent after finance minister Pranab Mukherjee said he would try to arrive at an agreed solution over the issue of wage revision in the bank.

Elsewhere, other Asian stocks recovered a bit from the previous session's sell-off, as solid economic data from the U.S. and Japan and fresh hopes that the Federal Reserve will consider further policy easing if necessary gave investors reasons to cherry-pick battered stocks.

However, European stocks lost ground, with key benchmark indexes in France, Germany and the U.K. last trading down about half a percent each, on jitters over Greece's problems.

IMF Managing Director Christine Lagarde said that a Greek exit would be "extremely expensive" and hard, but the IMF has to be "technically prepared for anything." Outgoing World Bank President Robert Zoellick said that he's concerned about the "ripple effects" reminiscent of 2008, if Greece leaves.

The euro paused for breath after tumbling to a four-month low against the greenback the day before on persisting worries over Greece's future in the euro zone.

European Central Bank President Mario Draghi said in a speech that the central bank has a strong preference for Greece to stay in the euro zone, but the ultimate resolve to stay in euro must come from the Greek people. The statement assumes significance in the wake of news that Greeks have withdrawn hundreds of millions of euros from banks in recent days, fearing a decline in their purchasing power if Greece were to leave the euro.

Meanwhile, a Spanish debt auction received mixed response, with the nation successfully raising debt at the upper end of its target at a higher borrowing rate.

by RTTNews Staff Writer

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