Indian shares on Thursday rose 0.7 percent to their highest close in seven weeks in thin year-end volumes, led by Infosys Technologies, Larsen & Toubro and gains in some automobile shares. State-run oil marketing firms Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum fell between 1.5 to 3 percent after India deferred a decision on a possible increase in diesel and cooking gas prices.
The 30-share BSE index ended up 133.04 points, at 20,389.07, with 25 of its components rising. It traded in a narrow range through the session on thin volumes, despite the expiry of monthly derivative contracts on Thursday. "The build up in open interest is subdued and volatility has been low. The market is a little more than fairly valued at this point, so there is still fear that a downside is round the corner," said Deepak Jasani, head of retail research at HDFC Securities.
For the year, the index is up nearly 17 percent, helped by record foreign fund inflows of $28.5 billion into local equities and most investors are optimistic that a robust growth outlook for the Indian economy bodes well for the domestic equities market in 2011. India's No 2 software services firm Infosys closed up 1.2 percent, while larger rival Tata Consultancy Services gained 1.1 percent and No 3 Wipro added 0.2 percent.
Larsen & Toubro, India's largest engineering and construction firm, ended 0.9 percent higher at 1,972.15 rupees, helped by order wins worth $259 million. Shares in automakers Tata Motors and Hero Honda rose 1.9 percent each, while top carmaker Maruti Suzuki and Mahindra & Mahindra ended marginally higher. Most vehicle makers are expected to announce price increases in early January. In the broader market, gainers were ahead of declines in the ratio of 1.33:1, with about 329.5 million shares changing hands. The 50-share NSE index closed up 0.7 percent at 6,101.85 points, its highest close since November 15.
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