Indian share prices rose 1.9 percent on Tuesday as investors shrugged off a hike in the amount of cash banks must keep in reserve and focused instead on strong company earnings, dealers said. They said the market rose steadily following a short blip intraday after India's central bank hiked its cash reserve ratio for banks by 50 basis points to seven percent but kept short-term borrowing rates unchanged.
The Mumbai stock exchange's benchmark 30-share Sensex index closed up 290.08 points to 15,550.99, its second straight gain. "The market saw a relief rally after recent volatility. We expect the market to consolidate at current levels," said Bipin Gandhi, dealer with brokerage BHH Securities. Gainers led losers 1,706 to 937 on volume of 52.72 billion rupees (1.3 billion dollars).
The rupee rose marginally against the dollar at 40.44 from 40.54 while it fell against the euro to 55.42 from 55.3. Engineering multinational firm Larsen and Toubro rose 160.8 rupees or 6.58 percent to 2,606.5 while housing lender HDFC rose 107.75 rupees or 5.65 percent to 2,016.5. State Bank of India, the country's largest lender, rose 45.5 rupees or 2.88 percent to 1,624.5.