* BSE index gains 1.83 pct; NSE ends 2 pct higher
* Rupee sees sharp rebound on suspected heavy RBI
* IT shares make record highs on business outlook optimism
* India services activity shrinks again in August, weakest
By Abhishek Vishnoi
MUMBAI, Sept 4 India's NSE index rose 2 percent
on Wednesday on value buying in blue chip stocks after a fall of
nearly 4 percent on Tuesday was seen as overdone, while IT
shares surged on improving business outlook.
Shares also tracked a sharp recovery in the rupee after
suspected heavy dollar selling by the central bank prevented the
battered currency from slipping to a record low.
However, analysts say volatility may persist as the country
faces its worst economic crunch since a balance of payments
crisis two decades ago amid rising conviction that the Federal
Reserve will trim its stimulus and Washington is seen moving
closer to a military strike on Syria.
"It's hard to predict which way the market can go as
negative newsflow continues to come at even lower levels," said
Deven Choksey, managing director at K R Choksey Securities.
The broader NSE index rose 2 percent, or 106.65
points, to end at 5,448.10, closing above the psychologically
important 5,400 level.
The benchmark BSE index rose 1.83 percent, or
332.89 points, to end at 18,567.55.
Among recently beaten down blue chip shares, Reliance
Industries Ltd gained 2.2 percent while Tata Motors
Ltd ended 4.9 percent higher.
IT shares surged on improving business outlook and rupee
depreciation, dealers said.
Tata Consultancy Services Ltd ended 3.4 percent
higher after earlier making its all-time high at 2,078.80 rupees
while Infosys Ltd gained 2.6 percent after earlier
hitting a record high of 3,139.90 rupees
Bank shares rose on hopes that the central bank may unwind
its liquidity tightening measures soon now that Raghuram Rajan,
a former chief economist at the International Monetary Fund
(IMF), takes charge of affairs.
In a reminder of the uphill task he faces, a report on
Wednesday showed that activity in India's services sector shrank
in August for the second straight month for its lowest reading
in four years.
ICICI Bank Ltd rose 4.4 percent and Axis Bank Ltd
ended 2.4 percent higher.
Jet Airways (India) Ltd ended 5.7 percent higher as
India's cabinet approved an accord with the United Arab Emirates
to nearly quadruple airline seats between the two countries over
The stock has risen 12.1 percent in three consecutive
session of gains following Etihad Airways' comments on Sunday
that it expected its investment in the Indian carrier to be
cleared by Indian authorities "imminently"
Ipca Laboratories Ltd shares surged 7.6 percent
after the company said in a statement that U.S. Food and Drug
administration found its oral solid dosage formulations
manufacturing facility in Pithampur 'acceptable'
However, among decliners, real estate companies fell after
the Reserve Bank of India said late on Tuesday that housing
loans from banks to individuals should be closely linked to the
stages of construction.
DLF Ltd fell 0.6 percent, Indiabulls Real Estate
Ltd ended 0.1 percent lower.
For additional stocks on the move double click
FACTORS TO WATCH
* Dollar index near six-week high on Fed 'taper' prospects
* Brent holds above $115, Syria tension stokes concern
* Syria worries check gains on brighter economic data
* 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.....
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
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
(Editing by Sunil Nair)