Sensex Rises; Rate Sensitive Stocks Surge

(RTTNews) - Indian shares rose notably on Tuesday, as investors seemed relieved by the absence of populist measures in the interim budget unveiled on Monday. Provisional data showing that FIIs bought shares worth a net Rs. 522.82 crore yesterday and the announcement by global ratings agency Moody's Investors Service that it was keeping a stable outlook on India's 'Baa3' sovereign rating also bolstered investor sentiment.

India's bond rating is supported by a large and diverse economy, high domestic savings and adequate foreign exchange reserves, Moody's said. However, the rating agency expects India's fiscal deficit to remain higher than peers as the country's low per capita incomes limit the government's income tax revenue base, while raising spending pressures.

Erasing initial losses, the S&P BSE Sensex ended the session up 170.15 points or 0.83 percent at 20,634.21. The broader CNX Nifty index finished at 6,127.10, up 53.80 points or 0.89 percent from its previous close.

Financials rallied, with HDFC Bank, ICICI Bank, HDFC and Axis Bank rising 2-4 percent after Finance Minister P Chidambaram reassured markets that the country's fiscal deficit will be contained at 4.6 percent of gross domestic product in 2013-14.

Automaker Tata Motors rose 1.3 percent and Maruti Suzuki climbed 2.6 percent after the finance minister reduced excise duties on cars, sports utility vehicles and two wheelers.

Mahindra & Mahindra added 0.7 percent. Mahindra Reva Electric Vehicles, a part of the Mahindra Group, has launched a rental scheme to boost sales of its electric car e2o.

Tata Power rallied 2.8 percent after threatening a tariff hike. Rival Reliance Infrastructure jumped 3.8 percent. Metal stocks closed mostly higher, with Tata Steel rising 1.8 percent and HIndalco shares closing 0.6 percent higher as commodities rose on the back of a weaker dollar.

ABB India climbed 12.6 percent on strong Q4 earnings, with profit growing more than three-fold despite higher finance costs and tax expenses. V-Mart Retail gained 1.1 percent on institutional buying.

Ambuja Cements and Godrej Consumer Products rose about a percent each on the back of bulk deals. Hexaware Technologies soared 10 percent and Force Motors jumped 15 percent on heavy volumes.

Dr Reddy's Laboratories shares rose 0.3 percent. UK-based GlaxoSmithKline Plc. said that its joint venture formed with Dr Reddy's would register its first product in the European Union sometime this calendar year.

Lupin gained a percent after the pharma major appointed Dr. Maurice Chagnaud as its president, Europe and head of inhalation strategy.

Bharti Airtel shares fell 0.8 percent. The telecom major announced that it has signed an agreement to acquire Loop Mobile, Mumbai's oldest operator, for about Rs 700 crore. Hindustan Zinc dropped 2.4 percent on reports a stake sale in the company is unlikely during the current fiscal.

Elsewhere, the Asian markets held steady, although Chinese shares fell from two-month highs on liquidity worries. Japan's Nikkei average jumped 450 points or 3.1 percent to finish at 14,843, after the Bank of Japan kept its monetary easing plan unchanged but doubled a funding tool to 7 trillion yen to stimulate bank lending.

The major European markets traded lower after the German ZEW survey indicated investor confidence fell more than forecast in January.