Mumbai: Indian shares climbed for a second day on Wednesday, rising 1.25% to their highest close in two weeks, as foreign appetite for risk revived on the back of higher world equities.
“The negatives seem to be discounted in the prices for now,” said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services. “We should see better times for our market from here.”
Data showed foreign funds were net buyers of $122.45 million in the last two days, after dumping more than $2 billion over 13 sessions.
Energy major Reliance Industries led the gains as its bid for LyondellBasell appeared jeopardised after the Luxembourg-headquartered firm settled a dispute with creditors, paving the way for the chemical maker to get out of bankruptcy.
“While the $13.5 billion offer of Reliance Industries remains a potential alternative for LB, we believe RIL’s chances of acquiring LB have diminished following this agreement,” Goldman Sachs said in a note.
The investment bank said it believes the buy has a strategic merit, but the bid not going through would be a better outcome than getting drawn into a bidding war and over-paying for the assets.
Reliance rose 1.4% to Rs1,032.
Tata Steel rallied the most in five months after the world’s No. 8 steelmaker posted late on Tuesday its first consolidated quarterly profit in four quarters and beat market expectations by a wide margin.
The share rose 6.4% to Rs584.90, with the company saying reviving global demand would further boost earnings in the three months to March.
Bharti Airtel erased some of the previous sessions’ losses after chairman Sunil Mittal told the Economic Times newspaper the top mobile operator hopes to conclude the deal to buy Zain’s African assets by 25 March and does not see funding as an issue.
The stock rose 2.4% to Rs279.10, after tumbling more than 13% over two days following the Zain offer.
The 30-share BSE index added 202.23 points to 16,428.91, its highest close since 3 February. Twenty-three of its components gained.
Focus of investors in the coming days will be on the national budget, which will be presented to parliament on 26 February. A strong pick-up in industrial activity is expected to allow the government to start rolling back stimulus packages.
Agriculture minister Sharad Pawar said on Wednesday high food prices have started to ease and would dip further next month, but the finance minister was worried about inflation amid signs the headline number may hit 10% by March.
Financials gained as investors were optimistic on their long-term prospects in a growing economy.
Top lender State Bank of India rose 1.7%, while rivals ICICI Bank and HDFC Bank climbed nearly 1% and 3% respectively.
Non-ferrous metals producer Sterlite Industries and aluminium maker Hindalco rose 3.5% and 5.2% respectively as base metal prices rallied.
Brokerage IDFC-SSKI Securities said on Tuesday it maintained a positive stance on Hindalco because of strong volume growth in India and operational turnaround of its Canadian unit Novelis.
In the broader market, gainers outnumbered losers in a ratio of 1.5:1 one volume of 343 million shares, slightly lower than last week’s daily average of 351 million shares.
The 50-share NSE index gained 1.2% to 4,914.