Indian shares rose 1.7 percent on Wednesday to their best close in nearly two weeks as hopes of strong economic and corporate earnings growth triggered bargain hunting, after the market had fallen 2.6 percent in November. The manufacturing sector in Asia's third-largest economy expanded at its fastest pace in six months in November on the back of robust new business and a sharp rise in export orders, a survey showed on Wednesday.
This came a day after data showed the Indian economy grew more than expected in the September quarter, defying weakness elsewhere. Shares in state-run Indian Oil Corp rose as much as 14 percent during the day, after its chairman said the fuel retailer would sell shares in January at a 30 percent premium to its close on Tuesday.
The main 30-share BSE index ended up 1.68 percent at 19,850 points, after having risen as much as 1.9 percent earlier, with 24 of its components advancing. The benchmark index is down 5 percent from a record closing high on November 4, after corruption scandals hammered shares in sectors such as real estate and financials.
Indian Oil Corp closed 11 percent higher at 384.10 rupees. Its chairman said the company aims to raise $4.4 billion in January through a follow-on share sale and that the pricing for offer was likely to be at 450 rupees apiece. The Indian government is selling a 10 percent stake, while the company will offer an equal number of new shares to raise 20 billion rupees, making the sale the biggest-ever share offering in the Indian market.
Shares in top lender State Bank of India rose 3.7 percent to 3,105.10 rupees and No 2 ICICI Bank gained 2 percent to 1,166.95 rupees on hopes that a fast-growing economy and pickup in industrial activity would boost demand for credit.
The banking sector index rose nearly 3 percent and the real estate sector index closed up 3 percent. Tata Motors was up 1.8 percent at 1,258 rupees. The maker of commercial vehicles and passenger cars said on Wednesday its November vehicles sales rose 1 percent to 54,622 units.
Explorer ONGC surged 3.2 percent to 1,288.50 rupees after its chairman said that the company's share sale was likely to be launched in March and that the oil ministry would decide on its stock split soon. In the broader market, gainers outpaced losers by a ratio of 4 to 1 on volume of about 640 million shares. The broader 50-share NSE index ended up 1.67 percent at 5,960.90.
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