Indian shares gain to over 2-wk high

Mumbai: India's main BSE index rose 1.2 per cent yesterday to its highest closes since May 10, as improved global risk sentiment spurred buying in financials such as SBI and other blue-chips that have taken a beating this month.

The domestic gains tracked higher Asian markets, as opinion polls showing a lead for Greece's pro-bailout camp helped calm fears the country would exit the Eurozone.

Market participants, however, warn of further volatility ahead given Indian shares are responding to global cues, while the expiration of domestic equity derivatives and the January-March quarter economic growth data are due on Thursday.

Further ahead, markets would need some type of assurance from the government about fiscal consolidation — given that worries about India's current account and fiscal deficits have exacerbated losses this month.

India yesterday said it had no immediate plans to raise the retail prices of diesel, kerosene and cooking gas, sending state oil companies lower, though it failed to have a big impact given traders had already reduced expectations about such an increase.

India's main 30-share BSE index rose 1.2 per cent to 16,416.84.

The broader 50-share NSE index advanced 1.3 per cent to 4,985.65, its highest close since May 8.

Despite the bargain-hunting seen yesterday — given the BSE index has fallen 11 per cent since its 2012 high on February 22 — analysts see little catalysts ahead.