Indian shares extend recovery

Bangalore: Indian shares rose 4.82 per cent yesterday as they extended their recovery from a sharp selloff as concerns about a global slowdown eased, with state-run oil retailers surging after the government increased fuel prices.

It was the market's big-gest daily rise since January 25, and took its gains over the past two days to seven per cent.

Reliance Industries, India's largest listed firm, rose 5.4 per cent to Rs2,514.70, taking its gains to 10.5 per cent over three days. The stock is still down 12.7 per cent in 2008.

The government raised retail prices of petrol and diesel by 4.6 and 3.3 per cent respectively to ease losses at state-run oil retailers squeezed by a surge in crude oil prices.

The news boosted shares of the retailers. Indian Oil ended up 13.8 per cent, Hindustan Petroleum rose 14.8 per cent and Bharat Petro-leum gained 10.8 per cent.

The BSE 30-share index rose 817.50 points to 17,766.63, its highest close since February 6, with 29 stocks rising.

The index had fallen 11 per cent over five days to Tuesday, and is still more than 16 per cent below a record 21,206.77 hit on January 10.

"It's a technical bounce-back supported by global cues. The market will not go down substantially from these levels, but one should wait for the momentum to build up before venturing in," said Sanjeev Patkar, head of research at Dolat Capital.

Brokerage India Infoline said the rebound could trigger some short covering, but advised caution.

Profit-booking

"One needs to be wary of any profit-booking at higher levels," it said.

Larsen & Toubro rose seven per cent to Rs3,507.15 after the top engineering and construction firm said it won an order in Qatar worth Rs3.1 billion ($78 million).

Shares in top private lender ICICI Bank rose 5.7 per cent to Rs1,162.35 and HDFC Bank added 4.9 per cent to Rs1,539.10 on fund buying, traders said. The sector index rose 4.6 per cent.

Despite trouble for their global peers, Indian financial stocks are fast emerging as the preferred choice of asset managers and investors who believe rising income in the world's second-fastest-growing major economy will boost demand for financial products.

The broader 50-share NSE index rose 5.53 per cent to 5,202, its highest close in more than a week.