Indian shares rebounded on Tuesday from two-month lows hit in the previous session as bluechip stocks such as Reliance Industries gained on short-covering ahead of the expiry of June derivative contracts later this week. Domestic shares were also helped by a late recovery in Chinese stocks from recent hefty losses and comments by top Federal Reserve officials that eased fears of an imminent end to its stimulus.
However, analysts warned Indian shares would likely remain weak in the near term after foreign investors sold 92.91 billion rupees ($1.55 billion) over 10 consecutive sessions to Monday. A number of shares have hit 52-week lows this month, including Bharat Heavy Electricals Ltd and Hindustan Petroleum Corporation Ltd on Tuesday. "Majority of stocks are below 2008 low. Index is deceptive. Chances of going down are much higher," said Vijay Kedia, director at private wealth management firm Kedia Securities.
The benchmark BSE index rose 0.48 percent, or 88.26 points, to 18,629.15, after hitting its lowest intraday level since April 16 on Monday. The broader NSE index rose 0.34 percent, or 18.85 points, to 5,609.10. Bluechips, which got punished heavily in June from the foreign sell-off, were among the leading gainers on Tuesday. Conglomerate Reliance Industries Ltd rose 1.4 percent, while cigarette maker ITC Ltd ended 1.7 percent higher.
Crompton Greaves Ltd rose 9.8 percent after it said in statement that its board would consider buy-back of shares. Sun Pharmaceutical Industries Ltd rose 0.2 percent after the US Supreme Court ruled on Monday that generic drugmakers cannot be sued under state law for adverse reactions to their products. Oil and Natural Gas Corporation Ltd rose 4.2 percent after the state-run oil company, along with Oil India Ltd, signed an agreement to buy a 10 percent stake in a Mozambique gas field from Videocon Group for $2.48 billion.
However, Oil India fell 1.5 percent, while Videocon Industries dropped 5 percent. Among other stocks that fell, Coal India Ltd dropped 0.9 percent after a company source told Reuters that UK-based investor The Children's Investment Fund Management (TCI) has sold nearly 19 percent of its shareholding in the company since April.