WSJ:India Shares Record Strong Gains; Rupee Ends Higher
By Gurdev Singh Virk
MUMBAI--Indian shares ended at a near seven-week high Tuesday, with the benchmark index recording its sharpest single-day percentage gain in over four years, boosted by a gain in the local rupee currency and positive global markets.
Signs of easing tensions in Syria and better-than-expected economic data from China lifted market sentiment, dealers said.
The Bombay Stock Exchange's S&P BSE Sensex index ended higher by 3.8%, or 727.04 points, at 19997.10 points, its highest since July 24. The 30-stock benchmark had gained 3.5% last week. On the National Stock Exchange, the Nifty index rose by 216.35 points, or 3.8% to 5896.75.
The rupee closed local spot trading at 63.84 to the dollar, compared with 65.24 Friday. The currency has now gained 5.9% in the past four sessions.
India's financial markets were closed Monday because of a religious festival.
Macquarie Equities Research said in note the bounce back in the markets may be short lived.
Economic data remain weak, uncertainty around the U.S. Federal Reserve's plan to scale back its easy-money policies persists and the quarterly earnings season next month is likely to disappoint, the note said.
Markets are placing way too much hope on new Reserve Bank of India Governor Raghuram Rajan and better clarity on the central bank's stance and direction of future monetary policy would go a long way in instilling confidence in markets, Macquarie said.
The central bank's next monetary policy meeting is on Sept. 20.
All 13 sector-based indexes of the Bombay Stock Exchange ended higher, with five of them gaining more than 3.0% each.
Fundamentally strong blue-chip companies led the rise.
Cigarette maker ITC closed 6.1% up at 335.40 rupees, while mortgage lender Housing Development Finance jumped 6.2% to 808.90 rupees.
Among other notable contributors, software company Infosys rose 4.3% to 3,150.70 rupees, while Tata Motors jumped 9.9% to 349.20 rupees.
The auto maker's U.K.-based unit, Jaguar Land Rover, said it plans to invest 1.5 billion pounds in new technology to make future models at its plant near Birmingham.
