Indian shares gain for third day; Q3 earnings key

Thu Jan 3, 2013 5:10pm IST

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* BSE index gains 0.26 pct; NSE ends 0.27 pct higher
    * Tech shares gain on hopes of better-than-expected earnings
    * Jet Airways shares jump on Etihad investment hopes

    By Abhishek Vishnoi
    MUMBAI, Jan 3 (Reuters) - Indian shares edged up on
Thursday, marking a third consecutive session of gains that
pushed indexes to their highest close in two years, as
expectations for better-than-expected quarterly earnings lifted
technology stocks such as Infosys.
    Shares have started 2013 on a strong note as investors bet 
the central bank will cut interest rates later this month, and
as the resolution to the so-called U.S. "fiscal cliff"
negotiations have benefitted global markets.
    Foreign investors have also bought a net 19.25 billion
rupees ($353.73 million) in equities this year, according to
provisional exchange and regulatory data, after buying a net 
$24.37 billion last year.
    However, analysts say 2013 would be a lot different from
2012, which saw a 25.7 percent gain in the benchmark index
, as budget problems in the U.S. are far from over,
while at home the fiscal defict poses a challenge for a
meaningful reduction in interest rates.
    "Market is in a wait-and-watch mode because U.S. problems
are just postponed and not solved as discussion regarding debt
limit will come back," said Jagannadham Thunuguntla, head of
Research at SMC Investmensts and Advisors.
    Earnings growth in 2013 will largely depend on the central
bank's stance on rates and government policy measures, he added.
    The benchmark BSE index rose 0.26 percent, or 50.54
points, to end at 19,764.78, marking its highest close since
Jan. 6, 2011.
    The broader NSE index rose 0.27 percent, or 16.25
points, to end at 6,009.50, its highest close since Jan. 6,
2011, and ending above the psychologically key level of 6,000
points.
    Indian companies are due to start reporting earnings next
week, with Infosys Ltd kicking off on Jan. 11. 
    Hopes that software service exporters would report solid
earnings were amplified by expectations an agreement on the U.S.
fiscal cliff would improve demand from the key U.S. market.
     Infosys gained 1.24 percent, Tata Consultancy Services Ltd
 rose 1.4 percent, while Wipro Ltd ended up 1
percent.
    Jet Airways gained 4.7 percent after a Indian
government source told reporters the carrier was the
front-runner for an investment from Etihad Airways.
 
    Jet later confirmed it was in talks with Etihad, in the
first confirmation of a potential deal by either side.
 
    SpiceJet Ltd gained 1 percent on hopes the carrier
would also eventually attract foreign investment, but Kingfisher
Airlines fell 2.3 percent 
    India's Dr. Reddy's Laboratories Ltd gained 2.4
percent after the company said it has launched prostate drug
finasteride tablets in the U.S. 
    Shares in gold loan providers rallied after a central bank
report proposed increasing the loan-to-value, or LTV, ratio to
75 percent from 60 percent currently.
    Muthoot Finance shares ended up 9.7 percent, while
Manappuram Finance closed 20 percent higher at the
maximun daily limit. 
    However, shares in Titan Industries, which makes
gold jewellery, ended down 1.75 percent on concerns over rising
costs after the government said it will make importing gold
costlier. 
    Shares in India's biggest domestic iron ore producer,
state-run NMDC Ltd, fell 3.22 percent after reducing
prices for its most common grade by almost 6 percent a tonne in
January, an unexpected move that will help cut the costs of
steel makers who rely on imports. 
    
   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Dollar rises as U.S. budget deal optimism wanes         
* Brent drops below $112 as US budget talks loom           
* Share rally loses steam as U.S. budget battles loom 
* 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 

($1 = 54.4200 Indian rupees)

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