BANGALORE: The BSE Sensex rose 1 percent early on Thursday as trading got underway for the new year with investors betting on an economic stimulus package and rate cuts, after losing more than half its value in 2008.
At 9:58 a.m., the 30-share BSE index was up 0.72 percent, or 69.45 points, at 9,716.76, after having opened up 0.75 percent and then rising as much as 1.02 percent, with 26 of its stocks rising.
The 50-issue NSE index rose 0.58 percent to 2,976.45.
All major Asian markets were closed for the new year holiday, while the U.S. market rose on Wednesday as investors bet that fresh initiatives from Washington would help stave off a deep recession.
Shares in Tata Consultancy Services will be watched after the top outsourcer said acquisition of the Indian back office operations of Citigroup is bringing in new business and it was hopeful of closing two contracts.
ICICI Bank will also be in focus after the No. 2 lender cut its main lending rates by 50 basis points from Wednesday, joining other lenders that have lowered rates to revive growth.
"There won't be much excitement in the market today because there are no great triggers and institutional investors are still in a holiday mood," said V.K. Sharma, head of research at Anagram Stock Broking.
Traders said investors would watch the annual inflation data which is seen falling to near 10-month lows in the third week of December, as lower fuel prices feed into the economy and the cost of manufactured products slides.
The data is due around noon.
India's current account deficit swelled to a record $12.54 billion in the September quarter and analysts warned on Wednesday it could balloon further as the world economy slows, putting pressure on the rupee.
On Wednesday, the main 30-share BSE index fell 0.71 percent at 9,647.31 points. It plunged 52.4 percent in 2008, its worst annual performance ever, and the outlook for 2009 was muddled by uncertainties with corporate earnings set to slow sharply.
Indian stocks could see another round of correction in early 2009, though lower valuations and economic fundamentals should lend support later, a fund manager at Principal Asset Management told Reuters.
Foreign fund withdrawals of more than $13 billion weighed down Indian shares in 2008 after record inflows of $17.4 billion in 2007 when the BSE index had risen 47 percent.
