Mumbai: Indian shares trimmed early gains on Tuesday as investors took profits on blue-chips after Monday’s small rise, but banks got a boost from speculation about a possible economic stimulus package and cut in interest rates.
India’s fourth-largest software exporter Satyam Computer Services rose as much as 5.8% on a newspaper report that private equity players were eyeing a stake in the company and market talk of possible management changes.
The benchmark 30-share BSE index was almost flat on the day at 9,537.10 points by 12:45pm, after climbing 1.2% earlier. Half its components were in positive territory.
The 50-share NSE index was up 0.3% at 2,913.
Reserve Bank of India’s governor met the prime minister on Monday ahead of next month’s interest rate review and a senior government official said a fiscal stimulus package was likely soon to give a lift to slowing economic growth.
“The hope of stimulus package is helping and also interest rate cut expectations. International markets have also aided the sentiment,” said Ambareesh Baliga, vice-president of Karvy Stock Broking.
Asian shares advanced for the second day in a row led by resource firms. Japan’s Nikkei average closed up 1.3% on its last trading day of the year, but shed 42 percent in 2008 as a whole.
India’s benchmark index has fallen about 53% so far this year.
Satyam shares stood at Rs155.80, up 5.1%, after the Economic Times cited unnamed market participants as saying institutional investors had approached IT and private equity firms for a stake sale.
Its shares are down almost a third since a botched attempt two weeks ago to buy two firms in which management held stakes.
“Satyam is a good bet for short-term trade with reports PE players are looking at a stake in the company,” said Amitabh Chakraborty, president of equities at Religare Securities.
Banks led the market, with the sector index up 0.5% on talk of a possible a cut in official interest rates.
The largest private sector bank, ICICI Bank, was up 0.5% at Rs446.80 and HDFC Bank rose 0.8%. State-run State Bank of India was down 0.4%.
In the broader market, 1,331 gainers led 827 losers on high volume of 185 million shares.