Indian shares rose 2.08 percent on Wednesday on firm European markets, in choppy trade a day ahead of the expiry of the monthly futures market contract, dealers said. The benchmark 30-share Sensex index rose 196.86 points to 9,667.9, its third straight day of gains. Sentiment improved on overseas fund buying, which has pushed the Indian markets up over 16 percent in just over two weeks.
In the past eight days, overseas funds have been net buyers of Indian stocks to the tune of 544.7 million dollars. "The markets shrugged off morning weakness on sustained buying in property and oil stocks towards the close," said an analyst with brokerage Sharekhan. Investors will eye Indias inflation rate due Thursday, where economists expect it to dip further towards zero, which would raise the scope for Indias central bank to lower interest rates again to spur a weakening economy.
Since October, the bank has slashed its key short-term lending rate to commercial banks by 400 basis points to a record low of five percent to encourage growth. Gainers just led losers 1,263 to 1,219 on turnover of 40.51 billion rupees (796 million dollars).
For the year so far, overseas funds have sold shares worth 1.74 billion dollars after offloading 3.38 billion dollars worth of stock in the same period last year. Tata Power shares rose 49.2 rupees or 7.12 percent to 740.2, after the company said it received 3.16 billion rupees (62 million dollars) on the sale of partial holdings in group firm Tata Teleservices. DLF rose 10.35 rupees or 6.22 percent to 176.65.
Reliance Industries rose 81.75 rupees, or 5.63 percent, to 1,533.4 ahead of natural gas production from its KG basin, off Indias east coast in early April. Tata Motors fell 1.27 percent or 2.05 rupees to 160 on profit-taking, as analysts maintained a gloomy outlook for the stock despite the launch of the worlds cheapest car, the Nano, earlier this week.
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