Indian shares rise 1.5 pct, Colombo bounces

INDIA: Indian shares rose more than 1.5 percent on Tuesday, cheered by robust earnings from software firms and expectations of strong growth.

India's economy, Asia's third-largest that has been expanding at about 8 percent over the past three years, could "realistically" target annual GDP growth of 10 percent, Prime Minister Manmohan Singh told a business gathering on Tuesday.

But mixed Asian markets, checked by fears of slower economic growth on high energy prices, may limit the upside.

Investors are also awaiting the central bank's monetary policy statement at 12 p.m. (0630 GMT). Ten out of 15 economists polled by Reuters last week forecast the Reserve Bank of India would raise the key short-term reverse repo rate by 25 basis points to 5.75 percent. A rate increase will help maintain interest rate differentials between the United States and India and could boost rate-sensitive capital inflows in the medium term.

Top services exporter Tata Consultancy Services climbed more than 10 percent to a new high of 2,099 rupees after it reported an expected 72 percent jump in quarterly profit and announced a bonus issue of one share for every held.

Wipro Ltd., which is forecast to report a 36-percent rise in profit on Wednesday, rose 2.6 percent to 554.50 rupees and Satyam Computer Services, which reports on Friday, gained 2 percent to 843.25. Index heavyweight Oil and Natural Gas Corp. rose 3 percent to 1,279 rupees as crude oil prices climbed above $70 a barrel on growing fears of military action against Iran.

The 30-share BSE index gained 1.57 percent to 11,720.95 points by 0510 GMT, off a peak of 11,719.70. Gainers beat losers more than three to one on trade of 47 million shares.

The 50-issue NSE index was up 1.89 percent at 3,489.75.

"Technology shares are likely to see continued interest on the good earnings and guidance, and we are likely to see stock-specific activity in other sectors as earnings come out," said an institutional dealer at SSKI Securities.

"But there are concerns about oil and higher interest rates, so we could see some resistance coming in at the higher levels," the dealer said. Elsewhere, the Colombo All-Share index climbed 1.08 percent to 2,311.51 points, after sliding more than 4 percent in the previous session on a spike in violence. The Karachi 100 index eased 0.4 percent to 12,222.05.

STOCKS ON THE MOVE

* JK Paper Ltd. rose nearly 5 percent to 62.70 rupees after a unit of Goldman Sachs Group Inc. invested $17 million, or 760 million rupees, in the company.

* Broadcaster Television Eighteen gained more than 3 percent to 645 rupees ahead of a board meeting to consider raising long-term funds.

* Cement makers gained on expectations of firm prices and strong demand as construction activity picks up. Grasim Industries gained 3 percent to 2,308 rupees and Mysore Cement rose 5 percent to 51.50 rupees.

Reuter