Indian shares end near 2-week closing high; techs lead

Wed Dec 19, 2012 4:39pm IST

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* BSE index gains 0.57 pct; NSE ends 0.56 pct higher
    * Non-banking financial shares gain after key bill passed
    * Steel companies shine on China coke duty cut

    By Abhishek Vishnoi
    MUMBAI, Dec 19 (Reuters) - Indian shares rose for a second
consecutive session on Wednesday, marking their highest close in
almost two weeks, led by IT stocks such as Infosys after recent
losses were seen as overdone and on hopes a resolution to the
"U.S. cliff" standoff would improve the outlook for the sector.
    Shares in non-banking financial companies such as Shriram
Transport Finance also rose after a bill laying the
groundwork for the issuance of new bank licenses was approved by
parliament.  
    Analysts said with government reform-driven gains likely to
subside as the winter session of parliament ends on Thursday,
global risk factors may become more important for domestic
markets. 
    Global shares hit 17-month highs and the euro surged
on Wednesday on hopes that U.S. politicians will reach a budget
deal and that Japan would implement further monetary stimulus. 
    "Markets would now pick an excuse from what is happening
globally like the U.S. fiscal cliff issue, otherwise there is
scope of correction," said Paras Adenwala, managing director at
Capital Portfolio Advisors.
    The benchmark BSE index rose 0.57 percent, or
111.25 points, to end at 19,476, marking its highest close in
almost two weeks.
    The broader NSE index rose 0.56 percent, or 32.80
points, to end at 5,929.60, closing above the psychologically
important 5,900 level.
    Shares in Tata Consultancy Services gained 1.8
percent as a U.S. budget deal would improve the outlook for a
key market for software services exporters.
    TCS shares also rose after Morgan Stanley upgraded the stock
to 'overweight' from 'equal-weight', noting IT spending could be
stable in fiscal year 2013 and revenues would improve in fiscal
2014. 
    Technology shares also rose after recent losses were seen as
overdone. Infosys ended 1.1 percent higher after
falling 6.8 percent in December, as of Tuesday's close
    Non-banking financial companies rose on hopes diversifying
into banking would improve their earnings potential. Shriram
Transport Finance gained 0.8 percent, after earlier hitting its
highest level since May 25, 2011.  
    Smaller private-sector banks also rose, with Federal Bank
 ending up 6.1 percent at an all-time closing high of
527.80 rupees, on hopes the banking amendment bill will spark
consolidation in the sector.
    Traders said NBFCs could look to purchase smaller lenders to
expand their footprint in the sector after getting banking
licenses.
    Among other smaller private banks, Dhanlaxmi Bank 
gained 3 percent, while Karnataka Bank ended 5.3
percent up.    
    Steel companies gained after China said it will scrap a 40
percent export duty on metallurgical coke, a steel-making raw
material, from next year. 
    The move is expected to weigh on prices of metallurgical
coke, giving steel firms access to cheaper imports from China.
    Tata Steel gained 2.4 percent while Jindal Steel
and Power ended 2.5 percent higher. 
    However, among stocks that fell, banks such as Oriental Bank
of Commerce lost 2.5 percent, while Dena Bank
 ended down 1.6 percent on profit booking.
    ICICI Bank fell 0.9 percent after earlier hitting
its highest level since December 2010, while Axis Bank 
ended 1.4 percent down as recent outperformance was seen
overdone.    
   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Euro hits 16-mth high vs yen, 7-1/2 month high vs dollar 
* Oil rises above $109 on hopes of US budget solution      
* U.S. budget optimism send shares, euro up          
* Foreign institutional investor flows          
* For closing rates of Indian ADRs                       
                       
   ASIA-PACIFIC STOCK MARKETS:                                  
Pan-Asia........ Japan.......   S.Korea... 
S.E. Asia.......        Hong Kong...  Taiwan.... 
Australia/NZ....        India.......  China..... 
                        
   OTHER MARKETS:                                               
Wall Street ....         Gold ....... Currency.. 
Eurostocks.....         Oil ........  JP bonds... 
ADR Report .....       LME metals. US bonds.. 
Stocks News US.. Stocks News Europe     
                       
   DIARIES & DATA:                                              
Indian Data Watch   Asia earnings diary 
U.S. earnings diary     European diary       
Indian diary          Wall Street Week Ahead  
Eurostocks Week Ahead                                   
                         
   TOP NEWS:                                                    
   For top Asian company news, double click on:       
   U.S. company news  European company news  
   Forex news        Global Economy news  
   Technology news  Telecoms news        
   Media news       Banking news           
   Politics/General    Asia Macro data      <ECONASIA 

 (Additional reporting by Manoj Dharra; Editing by Sunil Nair)
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