Mumbai: Bank stocks lead a rise in Indian shares on Tuesday morning after three days of losses, helped by gains in Asia, but the rally’s momentum was not expected to sustain as activity thinned out into the end of the year.
Top lender State Bank of India climbed 0.9% and rival ICICI Bank was 1.8% higher. Both banks have fallen this month, but have attracted some buying at their lows on favourable longer-term prospects in a growing economy.
At 10:38am, the 30-share BSE Index was trading up 0.37 % at 16,662.74, with 23 of its components gaining. On Monday, the index had closed at its lowest level since 10 November after three successive falls. The 50-share NSE index was up 0.6% at 4,981.30.
“It is only because of rally in Asia that we are trading higher today. Otherwise the scene is not very promising with a likely CRR (cash reserve ratio) or a reverse repo rate hike,” said R. Ganesh, director of Systematix Shares.
“This week and the next are skewed due to holidays. So the participation will be low,” added Ganesh.
Indian stock markets are shut on 25, 28 December and 1 January for holidays.
Copper producer Sterlite Industries rose 1.2%, aluminium maker Hindalco <HALC.BO> climbed 1.9%, and Tata Steel, the world’s eighth largest steel maker by output, was up 1.6%.
Ganesh said the metals pack was trading firm on expectations of better demand for metals in 2010.
Leading telecom companies Bharti Airtel and Reliance Communications rose 1.9% and 1.4% respectively, with some investors seeing value after the slide in the sector in recent months. The stocks are still down 11.5% and 24.7% respectively so far this year.
In the broader market, gainers led losers in a ratio of 2.6:1 on a volume of 75 million shares.