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Indian shares up on budget hopes
Indian shares rose 0.9 per cent on Tuesday to their highest close in a week, led by Infosys Technologies and Reliance Industries, taking cues from firmer global markets and hopes for an investor-friendly budget on Friday.
- Reuters
- Published: 00:27 February 27, 2008
Mumbai: Indian shares rose 0.9 per cent on Tuesday to their highest close in a week, led by Infosys Technologies and Reliance Industries, taking cues from firmer global markets and hopes for an investor-friendly budget on Friday.
The annual rail budget, unveiled yesterday, cut passenger fares and freight rates and stressed on plans to modernise the network.
Traders said lower freight rates and new investments would help sectors such as cement and steel.
The benchmark 30-share index gained 0.88 per cent, or 155.62 points to 17,806.19, its highest close since February 19. Nineteen components gained.
In the broader market, 1,654 gainers led 1,072 losers on volume of 251.4 million shares.
The 50-share NSE Nifty index added 1.33 per cent to 5,270.05.
"There has been certainly some improvement in the sentiment as global markets are doing well," said Amitabh Chakraborty, president of equities at Religare Securities.
"People expect at least there will be no negative surprise in the budget, it being the last budget before elections."
The main budget for the fiscal year beginning in April is expected to give tax breaks to individuals and companies and step up spending to woo voters ahead of national elections that will be due by early 2009.
Chakraborty said investors would be looking forward to the budget against the background of a slowdown in fiscal third quarter earnings, but would probably take a view after the March quarter results.
"If fourth-quarter results confirm a slowdown, then we will see downgrades and lesser targets. Foreign investors have been waiting for that clear signal," he said.
Net sellers
Foreign funds, which helped propel the market to a string of record highs in 2007 buying $17.4 billion of shares, have been net sellers of more than $3 billion this year.
Reliance Energy rose 4.6 per cent to Rs1,697.25 after the utility said its board would meet next week to consider a share buyback.
Infosys rose three per cent to Rs1,662.10 on hopes that No 2 software firm would be able to weather a possible slowdown in the United States, by expanding into newer markets and a more stable rupee, one trader said.
Reliance Industries, India's most-valuable firm, gained 0.9 per cent to Rs2,575.75.
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