Mumbai: Indian shares were up 0.4% in early trade on Tuesday, with financials leading the rise in line with mostly higher Asian stocks.
Financials shrugged off rising interest rate fears, and rose on an optimistic loan demand outlook backed by expectations of strong economic growth.
By 10:07am, the 30-share BSE index was trading up 0.43% at 18,129.13 points, with 24 of its components gaining.
The benchmark is up 3.8% so far this year, as foreign funds invested a net of $11.6 billion in Indian equities. Part of these flows were also directed to primary market offerings.
It has outperformed MSCI’s measure of Asian shares other than Japan and MSCI’s measure of world equities, which have dropped 2.6% and 4.7% so far in 2010.
However, market analysts said the rally may not sustain in the near term.
“Prices are looking expensive. Market is just about holding on. But, there are no positive triggers in the near term,” said Arun Kejriwal, director of research firm KRIS.
Top lender State Bank of India rose 0.6% while leading private lenders ICICI Bank and HDFC Bank climbed 0.9% and 0.3% respectively. Mortgage lender Housing Development Finance Corp firmed 0.8%.
Mahindra Satyam rose 3% as the software firm said that a New York court has ruled in its favour in a lawsuit filed by it against UK-based Upaid Systems.
Drugmaker Cipla rose 1.7% after sliding 3.6% in the earlier session.
Cairn India rebounded 1.7% after the Times of India reported Vedanta Resources’ chairman saying he does not foresee regulatory troubles in the stake buy.
In the broader market, gainers were nearly double the number of losers with volumes of 92 million shares.
The 50-share NSE index was up 0.4% at 5,439.40.
Project lender IFCI rose 1.7% to 62 rupees after its CEO Atul Rai told Reuters he expects the company’s net assets to grow 22-25% in 2010/11.
Yes Bank and IndusInd Bank rose 0.9% and 0.3% respectively after the Financial Express said the lenders are close to picking up a 1% stake each in the United Stock Exchange.