Indian shares remain higher

Indian shares rose for the second straight session, closing1.2 percent higher on Wednesday as investors picked up bargains in a market that has under performed so far this year. Lenders led the charge. Hopes that India's economic growth story will stay intact and in turn boost demand for loans pushed the financial pack higher.
Maintaining price stability and fighting inflation without constraining growth in the world's second-fastest growing major economy are the central bank's immediate priorities, the Reserve Bank of India's governor had said on Tuesday. The 30-share BSE index firmed 1.2 percent, or 217.86 points, to 18,206.16 points, with 26 components advancing. The 50-share NSE Nifty gained 1.2 percent at 5,480.25 points.
Advancing shares beat declining ones in the ratio of 1.4:1, but participation was low with a volume of 259 million shares on the BSE, sharply lower than the 90-day average daily volume of around 331 million shares. Foreign funds have turned net buyers of Indian equities in March, after dumping them in the first two months of 2011. As per the last available data from the market regulator, they have injected a net of around $305 million in Indian stocks in March, leading the benchmark index 2.1 percent higher.
The net outflow for 2011 totals $1.9 billion, the second-largest in Asia, after South Korea, research firm TrimTabs said in a note. I inflation and sluggish investment is likely to keep economic expansion well below the government's target of 9 percent in the coming year.
Billionaire Warren Buffett on Tuesday said he is looking to invest in large countries like India, China and Brazil, but added that restrictions on foreign ownership in India's insurance industry could act as a deterrent in the sector. Leading lenders State Bank of India, ICICI Bank and HDFC Bank gained between 0.6 percent and 3.8 percent. Private lenders also got a boost as the government on Tuesday sought parliamentary approval to amend a banking law for allowing investors in private banks to have voting rights proportional to their shareholdings, a long-awaited move to help grow the sector.
Real estate stocks gained after the steep decline seen this year. The realty index gained 1.9 percent, but is still down more than 25 percent in 2011. Top-listed real estate firm DLF firmed 2.8 percent. Energy giant Reliance Industries, which has the highest weighting on the main index, firmed 1.3 percent. The stock is still down 4.3 percent in 2011, after declining 2.9 percent in 2010.