Mumbai: Indian shares were trading 1% higher on Tuesday on track to post its first quarterly rise since 2007, but investors were wary as the market seesawed through much of the morning.
Analysts said a slowing domestic economy and political uncertainties ahead of general elections were concerns, but investors were busy trying to lift the market on the last day of trade for the quarter and the financial year.
Some funds were buyers in energy giant Reliance Industries and outsourcer Infosys Technologies on the last day of trading for the quarter and the financial year, but lenders ICICI Bank and HDFC Bank dropped.
By 12:05pm, the 30-share BSE index was up 1% at 9,666.02 points, with 25 stocks advancing. It had risen as much as 1.8% early in the session, before edging down 0.2%. The 50-share NSE index was up 1.2% at 3,012.15.
The benchmark, which fell 4.8% on Monday in the their worst one-day drop in almost three months after rallying more than a fifth over three weeks, needs to close above 9,647.31 to take it into positive territory for the quarter - for the first time in five quarters.
“The political scenario will weigh on shares. I don’t see them rallying much or taking a big cut until there is more clarity on that front,” Ambareesh Baliga, vice president at Karvy Stock Broking, said.
India goes to polls in April and May, with the ruling Congress party widely expected to get most votes, but not enough to gain a majority in parliament.
Policy advisers have said the economy will fare significantly worse in 2009 than in the previous year, and more doses of fiscal and monetary stimulus may be needed to boost demand and lift growth.
Companies will start reporting quarterly results from mid-April, and the expectations are bleak.
Reliance Industries, which has the biggest weight in the main index, rose 1.7% to Rs1,541.25, while No. 2 software-services exporter Infosys gained 1.6% to Rs1,318.40.
Private-sector lender ICICI Bank fell 3.4% to Rs326.60, while rival HDFC Bank slid 2.2% to Rs924.20.
In the broader section, advancers led losers 1,130 to 803 on light volume of 127.3 million shares.
Asian shares were mixed on Tuesday, with Japan’s Nikkei down 1.5% while MSCI’s measure of other Asian markets was up 0.6%.