Indian shares scale new height

Mumbai, July 3:

Indian share prices closed at a new record high on Tuesday as concerns of a hike in interest rates eased, dealers said.

They said buying sentiment improved on the waning of global and local rate concerns after the US Federal Reserve kept key rates unchanged last week and Indian inflation slipped. The 30-share Sensex index rose 142.25 points or 0.97 per cent to 14,806.51, beating its previous record of 14,664.26 on Monday. The Sensex also hit a new intraday record of 14,828.39, beating its previous 14,745.97 on Monday.

Dealers said sentiment improved as India’s inflation fell to a 14-month low of 4.03 per cent, according to data last Friday, lowering pressure for a further interest rate hike. Buying was seen in capital goods, banking and software stocks.

“The buying sentiment has improved. The markets could hit the historic 15,000-point level if first-quarter earnings data is strong,” said Naresh Garg, CEO of private sector Sahara Mutual fund.

Gainers led losers 1,440 to 1,200 on volume of 48.2 billion rupees (1.19 billion dollars). The rupee gained against the dollar to 40.58 from 40.66 while it fell against the euro to 55.29 from 55.05. Software stocks had a volatile day amid concerns about a strong rupee. Software firms in India bill many of their clients in dollars and a weaker dollar hits earnings.

“We expect a disappointing first-quarter performance” from IT services, said analyst Surendra Goyal at Citigroup Global Markets in a note, citing among other factors the impact of the rupee’s sharp appreciation and wage increases.

India’s top software exporter TCS fell 6.85 rupees or 0.60 per cent to 1,127.5 while Infosys, the second largest software exporter, recovered intraday to close up 4.4 rupees or 0.23 per cent to 1,947.5. India’s largest bank State Bank of India

rose 51.6 rupees or 3.37 per cent to 1,582.45 while engineering firm Larsen and Toubro climbed 24.05 rupees or 1.08 per cent to 2,258.95.