Mumbai: Indian shares rose 2.1% on Wednesday, climbing the most in six weeks after dropping to a three-month closing low in the previous session, with sentiment lifted by firm world markets and hopes stimulus measures will stay in place for some time.
Financials stocks led the gainers as investors placed bets on their long-term outlook in a growing economy. ICICI Bank rose 2.6% while bigger rival State Bank of India climbed 1%.
Mortgage lender Housing Development Finance Corp gained 3.8%.
India’s chief statistician, Pronab Sen, said the government may defer taking a call on stimulus measures and the finance minister could take appropriate steps later in the next fiscal year.
The 30-share BSE Index rose 2.06%, or 332.61 points, to 16,496.05, with only one component closing in the red. The 50-share NSE index gained 2.1% to 4,931.85.
“Firm global markets helped the gains today,” said R.K. Gupta, managing director of Taurus Mutual Fund. “The sentiment improved further on hopes the government may defer exiting the stimulus package.”
World stocks were firm as better-than-expected US company earnings and strong data raised expectations the economy would keep momentum into the first quarter.
At 3:46pm, the MSCI’s measure of Asian markets other than Japan was up 2.04% while pan-European FTSEurofirst 300 index rose 0.3%.
Larsen & Toubro climbed 3.8% to Rs1,449.85, after the engineering and construction firm said it had received new orders worth Rs1,100 crore in the buildings and factories segment.
Non-ferrous metals producer Sterlite Industries rallied nearly 6% to Rs780.30 and aluminium maker Hindalco firmed 3.3% to Rs156.10, buoyed by a rise in base metal prices.
Shanghai copper rose 2.8% and London metal extended gains, as the latest batch of positive US data, this time existing home sales, helped investor sentiment.
Tata Steel, the world’s eighth-largest steel maker by output, climbed 4.9% to Rs600.40.
UBS Securities raised Sterlite Industries to “buy” from “neutral” and raised the target price to Rs1,000 from 675 earlier, citing higher metal prices and commissioning of ramp-up in 2010/11.
It also raised the price target for Hindalco to Rs200 from 175 earlier, a note obtained by Reuters showed.
In the broader market, gainers outnumbered losers in a ratio of 1.7:1, on volume of 393 million shares, lower than last week’s daily average of 411 million shares.