Indian shares rise most in three weeks

Indian shares gained the most in three weeks on Thursday as investors looked for bargains in battered down stocks, with energy giant Reliance Industries leading the gains after a disappointing performance in the year so far. However, declining shares beat advancing ones in the ratio of 1.4 to 1 on the NSE, indicating a weak market breadth and triggering concerns the rise may falter soon. Nervous world markets, sticky domestic inflation and rising interest rates weighed on investor sentiment.
The 30-share BSE index firmed 1.01 percent - its highest daily percentage-point gain in June so far, or 176.86 points to 17,727.49 points. It had started lower. Twenty four of its components closed in the green. The 50-share NSE index ended up 0.8 percent at 5,320 Around 606 million shares were dealt on the NSE, slightly higher than its 90-day daily average volume of 601 million shares.
Foreign funds have been dumping Indian stocks recently, on worries over rising inflation and a slowdown in economic growth in the world's second-fastest growing major economy after China. They have sold a net of $628 million in a total of eight sessions to June 21. The stocks index is down 13.6 percent year-to-date, and is the worst performer among major Asian markets. MSCI's measure of Asian shares other than Japan is down nearly 3 percent so far in 2011.
Reliance Industries, which has the highest weighting on the main index, firmed 2.9 percent. The stock has declined nearly 18 percent year-to-date, due to lack of positive triggers and adverse news flow surrounding it. The brokerage retained its "buy" rating on the stock. Cigarette to hotels business ITC advanced 3.4 percent to 191.45 rupees on optimism over its business prospects, traders said.