Sensex at near-four-week closing high; volumes low

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex rose for a fourth consecutive session on Wednesday to mark its highest close in nearly four weeks, although amid low volumes, after software exporters such as Infosys gained on continued optimism about U.S. business.

A positive interim budget, stable inflation, foreign flows and satisfactory December-quarter results have increased confidence in Indian equities ahead of general elections, the next key trigger, due by May.

Finance minister P. Chidambaram projected a fiscal deficit of 4.1 percent in 2014/15 and a gross market borrowing of 5.97 trillion rupees, lower than what the market had been expecting in the interim budget on Monday.

 

Also boosting sentiment, overseas investors bought Indian shares worth $46.92 million on Tuesday, extending their buying streak in Indian shares to a fifth day, totalling $221.79 million, after being sellers in each of previous sessions this month till February 10, regulatory and exchange data showed.

"A domestic election is a non-economic event that has a huge bearing on sentiment and any lull in allocation into India by global investors would purely be temporary in nature. Long term FII investments into India in 2014 should continue to be robust," said Sandeep Nayak, executive director of Centrum Broking Ltd.

The benchmark BSE index rose 0.43 percent, or 88.76 points, to end at 20,722.97.

The broader NSE index rose 0.42 percent, or 25.65 points, to end at 6,152.75, closing above the technically important 6,150 level.

Both indexes marked their highest close since January 24 although volumes were dismal in comparison to Tuesday as India's currency, debt and money markets were closed on Wednesday for a public holiday.

Software stocks rose on continued optimism about U.S. business outlook, dealers said.

Infosys gained 1.9 percent, while Tata Consultancy Services and Wipro Ltd rose 1.5 percent each.

Among pharmaceutical exporters, Lupin Ltd rose 2.1 percent while Dr. Reddy's Laboratories Ltd ended up 1.1 percent.

Sun Pharmaceutical Industries Ltd gained 2.2 percent after the company got U.S. Food and Drug Administration approval to sell a drug to treat osteoporosis, a bone-weakening disease.

Ranbaxy Laboratories Ltd gained 3.2 percent after the New York Attorney General and the U.S. units of the Indian company and Teva Pharmaceutical Industries settled claims that an agreement between the two drugmakers unlawfully restricted competition.

Banks rose 0.33 percent, rising for a fourth day on continued optimism around a better-than-expected fiscal deficit target and gross market borrowing for 2014/15 in the interim budget.

HDFC Bank Ltd rose 1.5 percent while State Bank of India ended 0.5 percent higher.

However, among stocks that fell, Hero MotoCorp ended 1.8 percent lower on profit-taking after rising 2.2 percent over the last two sessions after the country's finance minister proposed cutting the factory gate duty on vehicles, a move that could boost sales.

(Editing by Sunil Nair)