Mumbai: Indian shares were trading 0.9% higher on Tuesday, led by gains in banks and financial stocks, mirroring world markets’ gain on optimism that the global economy was on a recovery path.
Banks and financials gained after the chief economic advisor to finance ministry said India does not need to tighten monetary policy now.
Leading lenders State Bank of India was up 0.1% at Rs2,294.60, while ICICI Bank rose nearly 1%to Rs887.50.
Mortgage lender Housing Development Finance Corp was up 1% at Rs2,699.
By 10:33am, the 30-share BSE Index was trading up 0.87% at 17,710.02, with only three of its components declining. It rose to as much as 17,729.78 in early deals, its highest level since May 2008.
“There is a lot of optimism being built in for third-quarter earnings. Also, there is no negative news to bring the market down,” said Daljeet Kohli, head of research for private client group at Emkay Global.
“But I think there is too much of euphoria as valuations are now looking stretched. It is time to start booking profits and take home your money,” he added.
Energy major Reliance Industries recovered from Monday’s decline and rose 0.9 percent to Rs1,084.90.
The stock had shed 1.3% on Monday as the firm sold some shares raising $577 million to aid its buy of bankrupt petrochemicals firm LyondellBasell.
“This share sale is likely to increase the cash balance available with the company to over $5.0 billion,” Angel Broking, a Mumbai-based brokerage, said in a note.
“This, coupled with lower balance sheet leverage, should help RIL to build a war-chest to fund the potential overseas acquisition,” it added.
Engineering and construction firm Jaiprakash Associates, which also has interests in power, was up 3.2% at Rs158.65, on robust cement sales for December.
“Jaiparaksh is benefitting from good delivery at its cement business. Capacity expansion along with signs of firm demand trend is helping,” said Kohli.
Copper producer Sterlite Industries rose 2.9% to Rs900.40,on improved demand prospects for the metal.
In the broader market, gainers were thrice the number of losers in a volume of 212 million shares. The 50-share NSE index was up 0.9% at 5,279.10.