Indian shares rose 4.07 percent Tuesday on fresh fund buying as national parties started building alliances ahead of the results of general elections due next weekend, dealers said. The benchmark 30-share Sensex rose 475.04 points to 12,158.03. Polling in the month-long elections ends on Wednesday. Results are due three days later.
India's large national parties, Congress and the Bharatiya Janata Party, - which are both unlikely to get a clear majority - are engaging in hectic alliance building with regional parties to gain momentum ahead of the results. Analysts expect the result will be a fragmented coalition.
"The market mood is that, if a negative result emerges from the election results, the correction would not be sharp," said Hitesh Agrawal, head of research with Angel Broking. Indian shares have risen 51 percent from a recent low of 8,047.17 points in early March.
Investors ignored India's industrial output data, which shrank in March, down for the third time in four months, official data showed Tuesday, with analysts saying a recovery can only be expected in the second half of the fiscal year. Production by mines, utilities and factories fell by a worse-than-expected 2.3 percent, hit by a poor manufacturing performance, compared with a 5.5 percent rise during the same month in 2008.
Gainers led losers 1,410 to 1,101 on turnover of 62.3 billion rupees (1.25 billion dollars). ICICI Bank, rose 35.2 rupees or 6.72 percent to 558.65, as sentiment improved on strong earnings from the country's largest bank State Bank of India last week.
On Saturday, State Bank of India had reported a better-than-expected 45.6 percent rise in first-quarter net profit to 27.42 billion rupees (557 million dollars) as loan demand improved. SBI shares rose 34.7 rupees or 2.76 percent to 1,295.45. Infosys Technologies rose 83.45 rupees or 5.51 percent to 1,597.95.