Indian shares edge up; caution prevails on RBI's rate stance

Wed Jan 30, 2013 4:53pm IST

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* BSE index gains 0.07 pct; NSE gains 0.1 pct
    * Government action, earnings key in the near term
    * Idea falls after Oct-Dec earnings disappoint

    By Abhishek Vishnoi
    MUMBAI, Jan 30 (Reuters) - Indian shares posted slight gains
on Wednesday as Reliance Industries Ltd recovered from
a four-session losing streak, while ICICI Bank Ltd 
rose a day ahead of its quarterly earnings. 
    Still, sentiment remained weak even after the Reserve Bank
of India lowered its key policy rate on Tuesday, as the central
bank struck a cautious note on further easing, citing concerns
about the high current account and fiscal deficits and
inflationary risks. 
    Market participants are now focusing on the government's
actions ahead of the budget presentation in late February, while
earnings from companies, such as IDFC Ltd this week,
will determine the short-term direction of the market. 
    "On the fiscal side, the government has to definitely act,
but on the current account we also need to see what is the
action plan," said Vaibhav Sanghavi, Director at Ambit Capital.
    "We believe that the government is determined to take
actions on reform front and the RBI will also support."
    The benchmark BSE index rose 0.07 percent, or 14.10
points, to end at 20,005, closing slightly above the
psychologically important 20,000 mark after briefly hitting a
two-year high on Tuesday.
    The broader NSE index rose 0.1 percent, or 5.85
points, to end at 6055.75.
    Reliance Industries rose 1.9 percent on value buying after
falling 4.3 percent in the last four trading sessions on
concerns  that an expected increase in gas prices may be less
favourable to private companies. 
    ICICI Bank gained 1 percent for a fourth day, marking a
cumulative gain of 4.1 percent, as investors bet on good
earnings when India's biggest private sector lender unveils
results on Thursday.
    Axis Bank rose 1.75 percent, marking a third day
of gains, on the back of strong demand in its share sale of up
to $1 billion. 
    Shares in Tata Steel ended 1.8 percent higher
after Citigroup retained its 'buy' rating and raised its target
price to 508 rupees from 430, citing "inexpensive" valuations, a
bottoming out of earnings in Tata Steel Europe and more
resilient volumes than other Indian steelmakers. 
    Separately, Morgan Stanley added Tata Steel to its regional
and emerging markets focus lists, saying the company offers "a
good restructuring story" due to its rising capacity, improved
sales volumes and the commissioning of a new coke oven battery. 
    However, among stocks that fell, Steel Authority of India
Ltd declined 0.73 percent after Citigroup downgraded
it to 'sell' from 'neutral', citing the recent out-performance
in shares. 
    Crompton Greaves Ltd shares fell 1.34 percent,
after the company reported a loss of 1.89 billion rupees in the
quarter ended December. 
    Shares in Idea Cellular Ltd ended 0.53 percent
lower after the mobile phone carrier posted a
weaker-than-expected October-December net profit.
 
    Morgan Stanley said it could lower EBITDA estimates for Idea
in fiscal 2013 by around 4 percent.
    The investment bank added Bharti Airtel Ltd could
also miss EBITDA estimates for the October-December quarter.
Bharti Shares fell 1.4 percent. 
    
   For additional stocks on the move double click        
     
   FACTORS TO WATCH                                             
* Euro hits 14-month high vs dollar                       
* Oil holds near three-month high on U.S. economy optimism 
* Euro surges to 14-mnth high, Fed decision awaited  
* 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      

 (Additional reporting by Manoj Dharra; Editing by Anand Basu)
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