Indian shares rise

Indian shares gained 1.1 percent on Tuesday, helped by gains in software services and financial companies as investors bet on strong corporate earnings in Asia's third-largest economy. The rise was supported by bargain hunting after the benchmark index slid nearly 8 percent over the past two weeks, but analysts cautioned the market rally might not be sustained as macro-economic worries and an interest rate hike loom.
Tata Consultancy Services, India's top software exporter, led the gains and rose to a record high after it beat street estimates with a 30-percent jump in quarterly profit and said it expected strong demand for outsourcing. Shares in Tata Consultancy ended up 5.5 percent at 1,200.55 rupees, after having risen as much as 6 percent to an all-time high of 1,207 rupees. The number of shares traded on the Bombay Stock Exchange was nearly five times the average volume over 30 days.
The 30-share BSE index ended 1.11 percent higher at 19,092.05 points, with 23 of its components closing in the green. The index had risen as much as 1.3 percent during the day. The 50-share NSE index closed 1.23 percent higher at 5,724.05 points. Tata Consultancy's strong earning outlook also boosted its smaller rivals, with Infosys Technologies rising 1.5 percent to 3,318.15 rupees and third-ranked Wipro closing with a gain of 2.8 percent at 479.15 rupees. Financials, which have been hammered since the beginning of the month on fears a likely interest rate increase will hurt loan growth, reversed the trend as investors hoped that banks would report improved results for the December quarter.
State Bank of India, the country's top lender, will report its third-quarter earnings on Saturday, followed by No 2 ICICI Bank and HDFC Bank next week. Shares in State Bank advanced 1.6 percent to 2,556.35 rupees, ICICI Bank rose 1 percent to 1,011 rupees and HDFC Bank gained 1.6 percent to close at 2,108.75 rupees. The sector index closed up 1.4 percent.
India's headline inflation rose an annual 8.43 percent in December on higher food prices, cementing expectations of a rate increase by the central bank next week to cool prices. Beset by the highest inflation of any major Asian economy, the central bank is widely expected to raise key rates by at least 25 basis points in its January 25 review to squeeze inflation to its projected level of 5.5 percent by March.
Engineering conglomerate Larsen & Toubro rose 0.1 percent to 1,683.45 rupees, having fallen 1.7 percent on Monday after the company warned it might not meet its full-year order book growth target. The firm had reported a forecast-beating 10.5 percent rise in quarterly earnings. In the broader market, 1,526 gainers were ahead of 1,368 losers in a relatively low volume trade of 268 million shares.