Indian stock index up 1 pct; doubles from 2009 low

 

Indian shares climbed for athird day in a row on Tuesday, taking gains in the main index to double the 2009 low in March, as investors joined a rally across Asia but there were concern about resistance.

Expectations for strong quarterly earnings and signs of a revival in industry under pinned the market, after the benchmark index surged past 16,000 to its highest close in 15 months on Monday.

At 12:20 p.m. (0650 GMT), the 30-share BSE index was up 1 percent at 16,175.87 points its highest level in 15 months and more than double its 2009 low of 8,047.17 in early March. Twenty stocks gained.

State Bank of India chairman said he expected earnings at the country's largest lender would rise 30-35 percent in the current quarter, with retail loans growing atabout twice the pace from the year earlier.

Its shares were trading up 1.3 percent at 1,838.50 rupees, after rising as much as 1.5 percent.

The domestic industry is showing signs of revival and foreign investors are also returning, a junior finance minister said on Tuesday.

However, the market's strong rally since hitting the 2009 low despite worries an erratic monsoon will slow down economic growth are causing unease.

"The concern is we are just rising too soon, too fast "said Nilesh Doshi, president of equity research at Techno Shares and Stocks. "Fundamentally, we are overstretched at current levels."

He said the rise was largely propelled by firmer global markets. Shares in Asia, excluding Japan, climbed to a year high on Tuesday.

The BSE index has risen nearly 68 percent so far in 2009, after sliding 52 percent last year.

Engineering and construction firm Larsen & Toubro firmed 1.6 percent to 1,623 rupees. Its financial services unit is in talks to buy Cholamandalam DBS Finance's domestic mutual fund operation, sources told Reuters late on Monday

Cholamandalam DBS was up 9.9 pecent at 69.65 rupees.

Energy giant Reliance Industries , which has the most weight in the main index, rose 3 percent to 2,060 rupees.

Tata Consultancy Services was up 2.3 percent at563 rupees, extending gains from the previous day after the top software services firm's CEO said on Monday its demand wasgood.

In the broader market, gainers led losers 1,668 to 972 on heavy volume of 290 million shares.

The 50-share NSE index was up 0.9 percent at 4,826.60.

Asian shares rose with Japan's Nikkei gaining 0.7 percent, while MSCI's measure of other Asian markets was up 1.2 percent.

MAIN TOP 3 BY VOLUME

* NHPC on 11.4 million shares

* Unitech on 8.3 million shares

* Ispat Industries on 6.7 million shares

STOCKS ON THE MOVE

* Jet Airways Ltd fell as much as 13 percent to 221.8 rupees after the airline said its pilots went on a flash strike.

* Coke producer Gujarat NRE Coke Ltd rose 3.7 percent to 58.55 rupees after it said its board would meet on Sept. 19 to consider a bonus issue of 'B' class shares.