Noon: Sensex rises 1.4%; banks gain

Noon: Sensex rises 1.4%; banks gain

Mumbai: Indian shares climbed 1.4% on Tuesday, with financial issues such as State Bank of India and ICICI Bank among the gainers on hopes for easier accounting rules for bond holdings.

Investors are betting data on tax payments by companies expected this week will indicate stronger earnings for the September quarter, Deven Choksey, managing director and CEO of K R Choksey Shares, said.

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Leading engineering and construction firm Larsen & Toubro Ltd and energy giant Reliance Industries Ltd led the gainers on signs a pick-up in economic activity will help the companies.

By noon 12:00pm, the 30-share BSE index was up 1.4% at 16,439.40 points, with 28 components in the green. The 50-share NSE index was up 1.6% at 4,887.25.

The benchmark, which had snapped a six-session rally on Monday, last week more than doubled from its March low and is up around 70% since the beginning of the year.

Telecoms firm Bharti Airtel was down 0.2% at Rs418.65 after a South African official said its proposed tie-up with mobile phone group MTN would need cabinet approval in South Africa.

State Bank, India’s largest lender, rose 2.25% to Rs2,000 and rival ICICI gained a percent to Rs834 on hopes the central bank would raise their hold-to-maturity (HTM) limits of government bond holdings - a move that would reduce notional mark-to-market provisioning.

A Reserve Bank of India official told reporters on Monday the central bank would examine a proposal to raise the HTM limits of government bond holdings of commercial banks.

Reliance Industries was up 1.3% at Rs2,174.50 while Larsen & Toubro rose 1.8% to Rs1,635.90.

In the broader market, gainers were nearly three times the number of losers on moderate volume of 148 million shares.

In Asia, Japan’s Nikkei was trading 0.1% higher, while MSCI’s measure of other Asian markets was up 0.8%.