Indian shares rose on Wednesday, reversing earlier losses, as investors bet the U.S. Federal Reserve would reaffirm its commitment to keep interest rates lower to boost the world's largest economy.
Also, sentiment improved after a panel set up by the finance ministry recommended increasing FDI ceiling in various sectors such as defense, telecommunications and multibrand retail. Global cues were mixed, with the Asian markets closing mostly lower, while European stocks were volatile ahead of the outcome of the two-day policy meeting of the U.S. Federal Reserve.
With Fed Chairman Ben Bernanke scheduled to hold a press conference shortly after the meeting, investors wait to hear what he has to say about possible tapering of bond purchases and the future course of Fed policy.
The benchmark 30-share Sensex closed up 22 points or 0.12 percent at 19,246, with 15 of its components advancing. The broader Nifty index rose by 9 points or 0.15 percent to 5,822, while the BSE mid-cap and small-cap indexes gained about half a percent each.
Hindalco led the gainers in the Nifty pack, rising 3.3 percent, while SesaGoa advanced 2.9 percent, Ambuja Cement rose 2.5 percent, Tata Steel added 1.8 percent and Cairn India closed 1.5 percent higher.
Telecom stocks rose across the board after telecom regulator announced new roaming regulations and a key panel led by economic affairs secretary Arvind Mayaram called for hiking the foreign investment limit across various sectors, including telecom. Bharti Airtel rallied 2.4 percent, Idea Cellular jumped 4.5 percent and Reliance Communication advanced 1.7 percent.
Tata Teleservices soared nearly 10 percent after the company said it would issue bonus shares, with the promoter group foregoing their entitlement to the bonus shares, in order to comply with market regulator SEBI's minimum public shareholding norms.
Jindal Steel and Power rose 2.3 percent on bargain hunting after sharp losses last week. KSK Energy rallied 3.5 percent on fund raising reports.
Religare Enterprises closed 0.4 percent higher after its promoters decided to dilute their shareholding to 49 percent to meet the guidelines for licensing of new banks in the private sector. IDFC gained 0.7 percent after its board approved a proposal to seek RBI approval for setting up a bank.
Tata Motors fell over 2 percent after the nation's largest automaker unveiled eight versions of its passenger vehicles, including the CNG version of its Nano minicar. Infosys ended little changed with a negative bias amid reports the company is wooing back its former top executives to rebuild the company.
Dr Reddy's Laboratories lost 1.7 percent on reports U.S.-based drug maker AbbVie Inc has dragged the Indian drug maker to court over patent infringement.
Hero MotoCorp, UltraTech Cement, Tata Power, NTPC, Sun Pharma, TCS and Coal India all ended down over a percent each.
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