Indian shares spring back

Indian shares rebounded 1 percent on Thursday, led by engineering conglomerate Larsen & Toubro and mobile operator Bharti Airtel, after European markets held their ground and raised hopes for a revival in foreign fund inflows. The market gathered steam in the last 45 minutes of trade after drifting down for most of the day as expectations grew the government will push key reforms to boost business confidence and halt a slowdown in growth.
Retailers, including market leader Pantaloon, rallied on hopes the supermarket sector will be opened to global players, although the plan hung in the balance as political opposition to the long-delayed reform mounted hours before a cabinet meeting. Signs of stabilisation in the rupee also helped the market pull back, a day after the benchmark stock index had skidded to its lowest close in more than two years.
The BSE index closed up 1.01 percent, or 158.52 points, at 15,858.49, after swinging to a trough of 15,479.97. All but five of its components closed in the green. The 50-share NSE index gained 1.06 percent to 4,756.45. In the broader market, there were 824 gainers beating 617 decliners on heavy volume of about 835 million shares. Pantaloon Retail jumped 12.6 percent to its highest close in more than six weeks, while Vishal Retail surged 8.6 percent and Shoppers Stop added 5.5 percent.
Indian retailers are hopeful that the opening of the sector to foreign players will spark joint ventures and investment from global operators that will be required to team up with local players. A Carrefour link-up with Pantaloon has long been anticipated. Foreign funds have been net sellers of more than $600 million worth of shares over six trading sessions till Tuesday, reducing the net inflows in 2011 to about $113 million, sharply below record investments of more than $29 billion seen in 2010.
The benchmark stock index is down 22.7 percent this year, making it one of the world's worst performers. Larsen shares rose 2.9 percent to 1,224 rupees, while Bharti Airtel gained 3.8 percent to 378.70 rupees, most of the gains coming in late trade. Shares in major Tata Group firms Tata Steel, Tata Motors and Tata Consultancy Services rebounded in late trade. Tata Steel ended up 0.8 percent, while Tata Motors and Tata Consultancy gained 2.8 percent each. The salt-to-software Tata conglomerate had announced on Wednesday Cyrus Mistry would succeed iconic Chairman Ratan Tata when he retires in December 2012, ending a global search that lasted more than a year.