Indian shares edge up

Indian shares ended up 0.2 percent in choppy trade on Monday as firm world equities helped them recover slightly from last week's 2.1 percent decline, but investors were not convinced the strength in the market was here to stay. The 30-share BSE index closed 0.16 percent, or 29.04 points, higher in choppy trade to 18,037.19, with 21 of its components advancing. The index had declined 10.6 percent in January and is down more than 12 percent year-to-date.
The 50-share NSE Nifty closed barely changed at 5,396 points. Foreign funds have pulled out $1.35 billion this year until February 3, on concerns over high inflation and as optimism over prospects of a US economic recovery diverted attention. Prime Minister Manmohan Singh said on Friday high headline inflation was beginning to pose a serious threat to India's high growth plans.
Economic growth in Asia's third-largest economy for the 2010/11 fiscal year is estimated to grow at 8.6 percent, a government statement said on Monday. Cipla shed nearly 3 percent after the drugmaker reported a larger-than-expected 19.4 percent drop in third-quarter net profit late on Friday.
"While management remains upbeat about the growth prospects for the company, its time-frame for delivery of returns to shareholders may be longer than current market expectations," Emkay Global said in a note. The brokerage downgraded the stock to "reduce" from "accumulate." Cigarette-to-hotel business ITC recovered from Friday's 4.2 percent decline and led the gains with a 2.6 percent rise. Energy giant Reliance Industries, which has the highest weight on the main index, climbed 1.1 percent. It had declined 2.5 percent on Friday.
Explorer Cairn India rose 1 percent after the Indian oil secretary said on Sunday he was hopeful of finding a "positive solution" to Vedanta Resources' deal to buy a controlling stake in the unit of Cairn Energy. Non-ferrous metals producer Sterlite Industries firmed 0.4 percent as London copper prices hit record high. Tata Steel, world's seventh-largest maker of the alloy, gained 0.6 percent, while aluminium producer Hindalco dropped nearly 2 percent. In the broader market, losers were 1.5 times the number of gainers in a low volume of 268 million shares.