Mumbai: Indian shares rose for the second day to close 0.3% higher on Tuesday, supported by gains in world equities, with financials leading the gainers as their long-term prospects in a growing economy appealed to investors.
Private-sector lenders ICICI Bank and HDFC Bank gained 1.6% and 0.2% respectively.
Mortgage lender Housing Development Finance Corp climbed 1.3%, but top lender State Bank of India bucked the trend to shed 0.1%.
The 30-share BSE index closed 49.27 points higher at 16,286.32, with 18 of its components gaining. It was down as much as 0.4% in early trade.
Volumes were low as investors remained sceptical ahead of Friday’s federal budget.
“There is uncertainty surrounding the budget,” said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services.
“There is a tendency to postpone activity till the budget, since the big day in now just a few sessions away,” he added.
Around 251 million shares were traded on the Bombay Stock Exchange, lower than the daily average of 331 million shares last week.
In the broader market, decliners led gainers in the ratio of 2.2:1.
“In recent years, budgets have neither decisively moved markets, nor changed the direction of the economy, and this budget should not be very different,” Citigroup analysts said in a note on Friday.
“However, this time, the low/negative expectations and the fiscal focus are relatively new, which might offer the market some possible near-term relief,” Citigroup analysts added.
Index heavyweight Reliance Industries declined 0.4% to Rs974.90, after a source familiar with the LyondellBasell deal said the energy giant has raised its bid for the bankrupt chemicals maker, to an offer which values the company at $14.5 billion.
Maruti Suzuki India declined 3.2% to Rs1,336.85 after its spokesman told Reuters the leading carmaker has been recalling 100,000 A-Star hatchbacks to fix a fuel leakage problem since last November.
“I think it is just a coincidence that we had a couple of players coming up with a recall plan around the same time,” said Anand Rathi’s Rawal, referring to the recent recall plan by Japan’s Toyota Motor Corp.
Rawal, who oversees $1 billion of assets, said the recalls were “a one-off event”.
Top mobile operator Bharti Airtel gained 1.1% to Rs279.75, as investors found it attractive after the recent meltdown following last week’s announcement of Bharti’s talks with Kuwaiti firm Zain for buying its African assets.
The stock is still down 11% since close of trade on 11 February.
In a note issued on Monday, brokerage CLSA said Zain’s contribution, debt refinancing and synergy benefits combined can compensate for the earnings per share dilution.
“The risk-reward for Bharti’s stock is favourable and we maintain our Outperform call,” CLSA analysts said in a note.
The 50-share NSE index also closed 0.3% higher at 4,870.05.