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Indian Shares End Firm On Fed Easing Hopes

Indian shares ended Monday's session on a firm note, with hopes for more monetary stimulus from the U.S. Federal Reserve underpinning sentiment. Most Asian shares rose in holiday-thinned trading today, with Hong Kong's Hang Seng index climbing 1.7 percent, as weak economic growth data from the world's largest economy fueled expectations for more monetary stimulus from the Federal Reserve.

The Fed gave no hint of more bond-buying last week but that didn't deter investors from speculating on the Fed's next move, given recent downbeat economic data and the uncertain economic outlook. The Japanese and the Chinese markets were closed for public holidays.

European stocks swung between gains and losses, as brewing concerns over Spain's finances and caution ahead of reports on U.S. consumer spending and a regional manufacturing survey both due out later in the day prompted investors to book some profits following a four-session rally.

Spain's National Statistics Institute confirmed today that the nation's economy shrank by 0.3 percent in the first quarter of 2012, officially entering its second recession since 2009, making the government's job of meeting the deficit targets tougher amid the public anger against the deepening austerity and record-high unemployment.

Earlier, Standard & Poor's downgraded its rating on 16 Spanish banks by two notches close on the heels of its downgrade of Spain's sovereign rating.

Closer home, the benchmark 30-share Sensex ended the session up 131 points or 0.76 percent at 17,319, while the broader Nifty index rose by 39 points or 0.75 percent to 5,248.

IT stocks led the gainers after economists and forex expects said the rupee will touch 54-55 levels against the dollar in the medium term, weighed by the underlying weakness in the domestic economy amid high fiscal deficit and a policy paralysis in New Delhi.

Tata Consultancy Services, India's largest software services exporter, which reported a healthy growth in both top line and bottom line for the fourth quarter last week, jumped 3.5 percent, while rival Infosys rose 2.8 percent.

Property developer DLF advanced 2.6 percent after Goldman Sachs upgraded the stock to 'buy' from 'neutral' and raised the target price.

Private sector lender ICICI Bank rose 1.4 percent even as ratings agency Moody's Investors Service said it has placed on review India's three top private sector lenders ICICI Bank, HDFC Bank and Axis Bank for possible downgrade. HDFC Bank slipped 0.2 percent and Axis Bank fell 1.3 percent. Shares of state-run lender SBI edged up 0.3 percent.

Metal stocks such as Tata Steel, Coal India, Sterlite, Hindalco and Jindal Steel rose between 0.1 percent and 3.4 percent as base metal prices ended mostly higher on the LME Friday.

Telecom major Bharti Airtel rose 0.9 percent, Reliance Communication added a percent and Tata Teleservices rallied 2.9 percent after Norwegian telecommunications operator Telenor threatened to exit India if the government accepts telecom regulator TRAI's proposals to auction airwaves at 13 times the price used in 2008.

FMCG player Dabur India rose a percent on reporting a 16 percent rise in its fourth-quarter net profit. Likewise, personal care and household goods maker Godrej Consumer Products rallied 2.5 percent after reporting a 36 percent increase in its fourth-quarter consolidated net profit.

Automakers ended mixed with Hero MotoCorp rising 2.4 percent, Bajaj Auto gaining 1.8 percent and Tata Motors adding 1.2 percent, while Maruti Suzuki India lost 2 percent on disappointing quarterly results.

Shares of power-equipment major BHEL fell 1.9 percent amid media reports that the Rajasthan government has scrapped tenders worth over Rs 12,000 crore for setting up mega thermal power projects in the state.

Canara Bank rose 1.6 percent after cutting lending and deposit rates. Riddhi Siddhi Gluco Biols hit the 20 percent upper circuit limit on reports that it has sold off its starch business to Roquette Freres for Rs 950 crore. Oriental Bank of Commerce tumbled 4.7 percent as it reported a 21 percent decline in quarterly net profit.

by RTT Staff Writer

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