* Investors grow confident of solution to eurozone debt
* Software stocks rise on hopes of higher IT spending
* Bank stocks fall on asset quality concerns
By Anurag Kotoky
NEW DELHI, Oct 24 Indian shares gained 0.92
percent on Monday after two straight sessions of losses, as
hopes for a solution to the euro zone debt crisis encouraged
investors, and helped them shrug off the possibility of an
interest rate increase by the central bank.
The Reserve Bank of India is widely expected to deliver one
final interest rate increase at its policy review on Tuesday and
then pause until the end of the fiscal year in March, a Reuters
Battered-down stocks in India's showpiece information
technology sector gained, with investors hoping that a stable
global economy will boost corporate IT spending.
Market leader Tata Consultancy Services gained 2.9
percent, while industry bellwether Infosys Ltd jumped
The benchmark 30-share BSE index closed up 153.64
points at 16,939.28, with 7 of its components in the red. The
index, which rose as much as 1.9 percent earlier, is still down
nearly 17.4 percent in 2011.
"Today we are mirroring Asia and Europe, we are hoping
against hope that something happens in Europe," said Arun
Kejriwal, strategist at research firm KRIS.
Analysts said expectations for a 25 basis point increase in
interest rates were mostly factored in Indian shares, one of the
worst performing major markets in the world this year.
State-run lender Union Bank Of India slumped 11.4
percent after its July-September results disappointed, and
non-performing assets rose.
"The first PSU (public sector undertaking) bank of
(large)size which has reported results is talking of quality of
assets getting affected, so the PSU banks came off quite
sharply," Kejriwal said.
Bank stocks fell 0.4 percent, with top lender
State Bank of India losing 2 percent.
ITC Ltd , India's top cigarette maker, which also
makes consumer items and runs hotels, gained 1.5 percent to
206.95 rupees, after it posted a 21 percent jump in net profit
for the September quarter.
Auto stocks, which have fallen significantly in 2011 on
higher cost of vehicle loans, also rose. The ongoing festive
season, considered auspicious for new purchases, is likely to
boost carmakers' sales for the current quarter.
Maruti Suzuki , India's top carmaker, rose 1.6
percent, while Mahindra & Mahindra , India's largest
utility vehicles maker advanced almost 1 percent.
Airline stocks rose on hopes the government will approve a
plan to allow foreign airlines to buy stakes in Indian
Kingfisher Airlines gained 0.44 percent, while
Spicejet rose 3.7 percent. Jet Airways ,
India's largest carrier by market share, rose 0.77 percent.
The broader 50-share NSE index closed 0.96 percent
up at 5,098.35 points.
There were 1.3 gainers for every decliners in the broader
market, where 478.7 million shares changed hands.
At 1017 GMT, the FTSEurofirst 300 index of top
European shares was up 0.48 percent.
World stocks, as measured by the MSCI world equity index
, rose 0.64 percent.
Some progress was made in Brussels over the weekend, with
agreements near on bank recapitalisation and on how to leverage
the European Union's EFSF rescue fund to try to stop bond market
STOCKS THAT MOVED
* Polaris Software rose 8.13 percent after it
raised its revenue outlook for 2012 to between 20.1 billion and
20.6 billion rupees from between 19.68 billion and 20.14 billion
rupees on Saturday.
* Paint maker Akzo Nobel India Ltd fell 9.36
percent after its parent Akzo Nobel NV abandoned its
2011 core profit guidance and said it would cut 500 million
euros ($690 million) of costs, in a bid to offset higher raw
material prices and as softening demand spread to China.
* Blue Star fell 8.5 percent after it reported a
loss for July-September.
MAIN TOP 3 BY VOLUME
* Vaswani Industries Ltd on 35.8 million shares
* Shree Ashtavinayak Cine Vision on 15.6 million
* Tata Motors on 12.9 million shares
FACTORS TO WATCH
* Indian rupee report
* Indian bond report
* Euro runs into profit taking, Ecofin hopes limited
* Oil up with equities, North Sea snag helps
* Stocks at 1-wk high, euro slips ahead of euro zone meet
* Euro zone progress extends Wall St gain?
* For closing rates of Indian ADRs
(Editing by Aradhana Aravindan)
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