Indian shares soar

Indian shares firmed 1.2 percent on Tuesday, taking comfort from a drop in oil prices, while a key ally of the coalition government put off a move to quit the cabinet, helping Asia's third-largest economy win back some investor confidence. The 30-share BSE index ended up 1.19 percent, or 216.98 points, at 18,439.65 points, with 25 of its components advancing. Outsourcers and financials led the gains. The 50-share NSE index or Nifty firmed 1.1 percent to 5,520.80.
A fall in oil prices and hopes of a patch up between DMK and Congress helped drive the market higher, said Manish Sonthalia, vice-president and fund manager at Motilal Oswal Asset Management Co. Foreign funds have pulled out around $1.9 billion since the start of this year up to March 4, leading to a decline of 10 percent in the main index so far in 2011. Hero Honda fell as much as 3.8 percent after Hero Investments said it had agreed to buy Honda Motors's 26 percent stake in the company at 739.97 rupees a share, a discount of more than 50 percent to its Monday's close.
The stock erased some losses and closed 0.8 percent lower at 1,518.15 rupees. Tech Mahindra and Mahindra Satyam rallied 9.3 percent and 3.8 percent respectively, after the Mahindra group said it is partnering with US telecom equipment maker Cisco Systems to provide a range of services, including cloud computing. Other outsourcers also gained as investors placed their bets on a global economic recovery and optimism over order flow.
Top outsourcer Tata Consultancy Services firmed 1.4 percent after its chief executive said the company was seeing good demand for outsourcing services across sectors and expected client spends to be better in fiscal 2012. Smaller rivals Infosys Technologies and Wipro climbed 2.5 percent and 0.7 percent, respectively.
Financials rallied as a fall in crude oil prices eased some inflationary pressures. Leading lenders State Bank of India, ICICI Bank and HDFC Bank rose between 0.8 percent and 1.3 percent. Advancing shares beat declining ones in the ratio of 1.7:1 in the broader market, in a volume of 270 million shares on the BSE, lower than 30-day daily average of 281 million shares.