Indian shares gain on hopes of RBI easing rates

Fri Jan 25, 2013 4:57pm IST

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* BSE ends pct 0.9 higher; NSE rises 0.92 pct
    * Maruti Q3 profit doubles, first rise in 6 quarters

    By Manoj Dharra
    MUMBAI, Jan 25 (Reuters) - Indian shares posted their
biggest daily percentage gain in almost two weeks on Friday as
interest rate-sensitive stocks such as State Bank of India
 rallied on expectations the central bank will ease
monetary policy next week.
    Maruti Suzuki India Ltd rose 4 percent after the
country's biggest carmaker said its third-quarter profit more
than doubled while posting healthier operating margins than
expected. 
    Shares in banks, auto makers, and property developers have
rallied since last month on expectations the Reserve Bank of
India will start cutting interest rates this year, starting with
the policy review on Tuesday.
    Most economists expect the RBI to cut India's key lending
rate by 25 basis points on Tuesday, for the first time in nine
months. 
    "RBI would be cutting rates on Jan. 29 and it would be a big
positive for the market. Quantum of rate cut should not matter,"
said Nagji K Rita, Chairman & MD, Inventure Growth & Securities.
    Nifty will be making a new high this year after the reversal
of interest rates, Rita added.
    The benchmark BSE index rose 0.9 percent, or 179.75
points, to end at 20,103.53, its biggest daily gain since
January 14.
    BSE index gained 0.32 percent for the week, its second
weekly gain in three weeks
    The broader NSE index rose 0.92 percent, or 55.30
points, to end at 6,074.65, and rose 0.17 percent for the week.
    Banks were among the leading gainers for the day. State Bank
of India rose 2.22 percent, while ICICI Bank Ltd 
gained 0.73 percent.
    Bank of Baroda surged 5 percent and Bank of India
 gained 4.5 percent on valuations that were considered
attractive after profit concerns hit the shares earlier this
month.
    Property shares that would benefit from lower rates also
gained. DLF Ltd rose 3.2 percent, while Unitech
 surged 7 percent higher, recouping its 7 percent fall
on Thursday.
    Shares in Reliance Communications Ltd gained 7.62
percent after The Economic Times newspaper reported the company
was in talks to sell a stake in its mobile tower unit to
Reliance Industries Ltd 
    Shares in ITC Ltd gained 0.8 percent to 299.75
rupees. The stock has gained 9.6 percent in the last two weeks,
moving towards its record high hit on Dec.12, as investors felt
fears of a potential duty on cigarettes had dragged the stock
down excessively. 
     Exide Industries shares fell 2.3 percent, down
for the second day after Dutch banking and insurance group ING
 said it was selling its 26 percent stake in an Indian
insurance venture to local partner Exide.
     Shares in Reliance Industries ended 0.4 percent
lower as recent recommendations on a revision in local gas
prices was seen benefiting state-run upstream companies such as
Oil and Natural Gas Crop and Oil India with
immediate effect.

 (Additional Reporting by Abhishek Vishnoi; Editing by Anupama
Dwivedi)
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