Indian shares shrugged off a sluggish start and climbed for a second day on Tuesday, powered by energy major Reliance Industries and software services bellwether Infosys Technologies. A revival in buying by foreign institutional investors (FIIs) this month spurred demand for stocks that had fallen recently, but worries about the outlook remain with more rate increases in the offing to stem high inflation, traders said.
Engineering and construction conglomerate Larsen & Toubro and consumer goods leader Hindustan Unilever, stocks that had gained recently, were dumped. The 30-share BSE index rose 0.41 percent, or 75.51 points, to 18,495.62, with 18 of its components gaining ground.
The 50-share NSE index was up 0.4 percent at 5,556.15 points. Around 464 million shares changed hands on the NSE, with gainers beating losers in the ratio of 1.4 to 1. "With the FII figures positive in recent sessions, there is some genuine buying interest," said Neeraj Dewan, director with Quantum Securities. Foreign funds have bought $307 million of shares in June after pulling out $1.16 billion in May.
Reliance Industries, which has the heaviest weight on the index, rose 2.2 percent to 958.25 rupees as investors bought the beaten-down stock. Worries about decline in gas output from Reliance's blocks off India's east coast have dragged down shares of the most valuable firm 9.5 percent this year.
Infosys climbed 1.9 percent, leading a rebound in export-focused software services that dropped recently on worries about the pace of recovery in the United States, the biggest market for these companies. Bigger rival Tata Consultancy Services Ltd added 1.3 percent, while No 3 Wipro Ltd shed 1 percent. Traders said investors were churning their portfolios and the outlook was still uncertain. "The market is likely to be rangebound with investors watching inflation, interest rates and monsoon data," Dewan said.
A government panel is expected to take a decision on Thursday to raise state-controlled diesel and cooking gas prices, a move that will accelerate inflation. Leading car maker Maruti Suzuki reversed early losses and ended up 0.65 percent. Workers at its plant in the northern state of Haryana have been on strike since Saturday, disrupting production and the stock had fallen as much as 1.7 percent early on Tuesday. Larsen ended 1.3 percent lower at 1,705.60 rupees while Hindustan Unilever shed nearly 2 percent at 308.75 rupees.