Indian shares rose for the third straight session and closed 0.9 percent higher on Tuesday helped by firm world equities and investor optimism surrounding next year's prospects. Financials and metal producers were the top gainers, propelling the index to their highest close in five weeks.
Lenders advanced as investors placed bets on promising loan demand prospects backed by strong economic growth in the world's second-fastest growing major economy after China. Top lender State Bank of India gained 1.5 percent while leading private lenders ICICI Bank and HDFC Bank firmed 3.6 percent and 1.9 percent. The 30-share BSE index climbed 0.86 percent or 171.44 points to 20,060.32, its highest close since November 15, with two-thirds of its components closing in the green. The 50-share NSE index gained 0.9 percent to 6,000.65 points.
"The market here rose as the rest of the world was doing fine. Also, it seems like the confidence is coming back," said Anish Marfatia, head of sales trading at Avendus Securities. Foreign funds have invested a total of $28.4 billion in the Indian primary and secondary equities, driving the benchmark index nearly 15 percent higher so far this year. However, their interest has been muted in the recent few sessions as the holiday season nears in the western countries. Mital expects the Sensex to touch 25,000 points by end-2011.
Advancing shares outpaced declining ones in a ratio of 1.8:1, in a relatively better volume of 456 million shares. Metal makers rallied rose as base metals traded in the green in key world markets. Tata Steel, the world's seventh-largest steelmaker, rose 1.7 percent.
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