Mumbai: Indian shares were trading 0.1% higher on Tuesday, supported by a small rise in its Asian peers, with Reliance Industries and Larsen & Toubro leading the charge.
Asian shares rose modestly ahead of a Federal Reserve policy meeting expected to reiterate a pledge to keep rates low for a long time.
By 10:08am, the 30-share BSE index was trading up 0.1% at 17,181.86, with 17 of its components gaining.
“We are just in a lacklustre mode after the rally post the (federal) budget. Also, some amount of investments are getting diverted in the primary market,” said Gajendra Nagpal, CEO of Unicon Financial.
Foreign funds have pumped in more than $2.5 billion in Indian equities in 10 sessions to March 14, latest data showed.
A portion of this has been absorbed by primary market offerings and Tata Motor’s stake sale by Daimler.
Last week, top iron ore miner NMDC concluded its $2.6 billion share sale while animation firm DQ Entertainment’s Rs128 crore initial public offering was more than 84 times covered.
Nagpal said the valuations were not cheap and he expects the market to trade in a narrow range until corporate earnings for the March quarter start trickling in next month.
“After the big event - the budget - there are no immediate domestic triggers. Besides, there is no good news flow internationally either,” he added.
Energy major Reliance Industries, which has the highest weight on the Sensex, rose 1.3% to Rs1,040.60.
“Refining margins and petchem margins have started looking up. Besides, Reliance had been an underperformer. So, it is catching up now,” Nagpal said.
The stock is down 4.5% so far in 2010, while the benchmark shed 1.6%.
Engineering and construction firm Larsen & Toubro climbed 0.7% to Rs1,565.80, after declining 3% over five previous sessions.
Financials continued to reel under pressure on fears that rising inflation strengthened the case for a rate hike by the central bank at its policy review next month.
On Monday, data showed annual wholesale price inflation accelerated to 9.89% in February, the highest since October 2008 and well above the Reserve Bank of India’s end-March projection of 8.5% and the 8.56% January reading.
Leading private lenders ICICI Bank and HDFC Bank dropped 0.8% and 1.4% respectively, while top lender State Bank of India was trading flat.
In the broader market, gainers outnumbered losers in a ratio of 1.5:1 in a volume of 71 million shares.
The 50-share NSE index was up 0.1% at 5,131.60.