Indian shares rallied to a 28-month high on Wednesday, buoyed by rate cut hopes after RBI Governor D Subbarao said the central bank will take note of falling inflation when discussing potential interest rate cuts. Rate-sensitive realty, banking and auto stocks spearheaded the rally, while IT stocks underperformed to end with modest gains.
Extending gains for the second straight session, the BSE 30-share Sensex ended the session up about 490 points or 2.5 percent at 20,213, with 29 of its components advancing. The broader Nifty index jumped 151 points or 2.52 percent to 6,147, while the BSE mid-cap and small-cap indexes rose 1.6 percent and 1 percent, respectively.
State-owned lender PNB led the gainers in the Nifty pack, climbing 7.6 percent, while Reliance Infrastructure rallied 5.2 percent on robust results. The Anil Ambani group company reported a 76 percent jump in fourth-quarter profit, beating estimates.
Among other prominent gainers, SBI, Lupin, HDFC, IDFC, Kotak Mahindra Bank and IndusInd Bank rose 4-5 percent. Property developer DLF advanced 4.8 percent after it received good response for its share placement. Larsen & Toubro rallied 4 percent on fund raising reports.
Tata Motors rose over 2 percent after its JLR unit reported a 12 percent increase in April sales. Eicher Motors climbed 2.8 percent, adding to the precious session’s 7 percent rally, after posting strong quarterly earnings.
ONGC and Oil India rose 3-4 percent, extending gains for a second successive session, on expectations the government would allow them to reduce the discounts they must give PSU refiners on crude purchases because of the recent fall in global crude prices.
United Breweries advanced 2.9 percent after Heineken UK bought a 3.21 percent stake in the company controlled by liquor baron Vijay Mallya. Hindalco gained 2.7 percent after its subsidiary Novelis posted turnaround results for the fourth quarter of fiscal 2013.
IRB Infrastructure Developers soared 6 percent after its board approved a proposal to raise up to Rs. 500 crore in one or more tranches by issuing non-convertible debt securities on a private placement basis.
Elsewhere, other Asian markets ended mostly higher on optimism over growth in the U.S. economy. Japan’s Nikkei index rose 2.3 percent to 15,096, its highest closing level since December 28, 2007, buoyed by a falling yen and rising global equities, while stocks elsewhere posted modest gains, awaiting U.S. data on industrial production and homebuilder confidence scheduled to be released later in the global day.
European stocks were mixed as investors digested weak German and French GDP data. Germany narrowly avoided contraction in the first quarter, while France slipped entered a shallow recession. A report released by Eurostat showed that the euro area economy contracted by 0.2 percent sequentially in the first quarter versus expectations for a more modest 0.1 percent drop.
by RTT Staff Writer
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