Indian shares snap eight-day fall

Indian shares closed 0.75 percent higher on Tuesday on short covering, snapping an eight session losing streak, although the gains are seen as temporary as concerns over tardy policymaking and a falling rupee continue to weigh. Investors rushed to cover short positions in many battered blue chips before the expiry of the monthly derivatives contract on Thursday.
The rupee skidded to an all-time low of 52.73 to a dollar on Tuesday as oil refiners and other firms scrambled to buy dollars, with the currency looking increasingly vulnerable to a swelling current account deficit and fears over the global economy and eurozone.
The federal government is banking on the brief winter session of parliament, which commenced on Tuesday, to kick-start its long-stalled policy reforms. However, analysts said decisive action was needed to create a meaningful rally. "This can be a corrective rally, a temporary arrest making place for the next fall; but whatever way you put it, we are not out of the woods," said Arun Kejriwal, strategist at research firm KRIS. The 30-share BSE index ended up 0.75 percent at 16,065.42 points, with 18 of its components closing in the green. The benchmark, which is down about 22 percent this year, is among the world's worst performing stock index.
The 50-share NSE index ended up 0.71 percent at 4,812.35 points. In the broader market, 1.04 gainers outpaced every loser, on a volume of 605.3 million shares. Automaker Tata Motors led the gains, soaring 6.8 percent, while Maruti Suzuki, India's top car maker, climbed 1.75 percent. The auto index, which had fallen 11.3 percent in November, added 1.08 percent.
Short covering sent shares in HDFC rise 2.3 percent, while ICICI Bank and top lender State Bank of India rose 1.9 percent and 1.03 percent, respectively. The banking index, which has fallen 13.7 percent so far this month, rose 0.55 percent on Tuesday. Reliance Industries, India's top listed firm, rose 1.13 percent, while tech giant Infosys Ltd jumped up 2.02 percent. The index has dropped 9.3 percent so far this month amid worries about the inability of the government to push through major policy decisions and slowing corporate earnings growth. Foreign funds have sold more than $300 million worth of shares over last week, reducing the net inflows in 2011 to just under $400 million, sharply below record inflows of over $29 billion received in 2010.