Mumbai: Indian shares rose 1.4% on Tuesday to their highest close since mid-October, as funds chased blue chips including Reliance Industries and Infosys Technologies in the last two hours of trade.
Energy major Reliance climbed 2.4% to Rs1,081.20, paring some of Monday’s 3.1% fall. The Economic Times reported it was still in talks with banks to raise $8-$10 billion for the acquisition of bankrupt chemical company LyondellBasell.
“It is a strategic move, a good one by Reliance Industries,” said Vinay Nair, an analyst with Khandwala Securities.
“The timing is just right, as the assets can be bought at reasonable valuations,” he said, adding he would like to see more details on the bid.
The 30-share BSE Index closed 1.44% or 244.54 points higher at 17,227.68, with 27 components gaining. It was the index’s highest close since 17 October, when a special trading session for the Diwali festival was held. The 50-share NSE index closed 1.60% higher at 5,147.95.
“There were orders triggered from FIIs (foreign institutional investors) in the second half. The dollar index weakened after appreciating against other currencies yesterday,” said Deven Choksey, MD and CEO of KR Choksey Shares.
“This was the perfect time to bring in dollar money to Indian equities,” he added.
IT bellwether Infosys Technologies rose 1.4% to a record-high close of 17,227.68 rupees.
“Increased investments in sales and marketing, greater hiring of on-site local delivery staff, pick-up in lateral hiring in India and decision to visit campuses for fresher hiring; all point towards high confidence in business prospects for FY11,” CLSA said in a note on Infosys over the weekend.
Top mobile operator Bharti Airtel rose 4.1%, its eighth straight rise, to a six-week closing high of Rs329.20. Analysts said there was value in the stock following a slump since October on an intense price war among telecoms.
“We believe the impact of the tariff cut and regulatory uncertainty are already in the market price,” Ambit Capital analyst Amit Ahire said in a note.
“Strong subscriber base marginally reducing ARPUs (average revenue per user) and better control over cost would lead to profit growth,” he said, upgrading the stock to buy from hold.
Tata Steel rose to to 2.2% to Rs568.55. The world’s eighth-largest steel maker said its domestic sales in November rose an annual 34.5% to 498,000 tonnes.
Engineering and construction firm Larsen & Toubro rose 1.1% to Rs1,656.40, It said it had won an order worth $180 million from Nuclear Power Corp of India.
In the broader market, gainers were nearly double the number of losers on a moderate volume of 397 million shares.