Reuters

Indian shares rose yesterday to record closing highs as expectations of further monetary stimulus in the eurozone raised hopes of continued foreign inflows, lifting blue-chips such as ICICI Bank.

The European Central Bank is due to hold its next policy review on September 4, which comes after its president Mario Draghi appeared to open the door for more monetary easing by saying all available tools would be considered should inflation in the eurozone fall further.

Foreign investors bought Indian shares worth $60.4mn on Tuesday, bringing the total for the year to nearly $13bn in 2014.

Traders now await the expiry of equity derivatives today, India’s April-June growth data tomorrow and balance of payments data this week, to gauge near-term direction of the market.

“India remains in a bull run. Inflows would continue as a lot of money is waiting on the sidelines to be invested in Indian shares,” said Phani Sekhar, fund manager at Angel Broking.

The broader NSE index rose 0.4%, or 31.30 points, to end at a record closing high of 7,936.05, and above the psychologically important 7,900 level.

The index had climbed to an all-time high of 7,968.25 on Monday.

The benchmark BSE index rose 0.44%, or 117.34 points, to end at 26,560.15, marking a record closing high and its fifth consecutive day of gains.

Blue-chips, which tend to benefit most from foreign inflows, led the gainers: ICICI Bank rose 2.1%, Tata Motors gained 1.8%.

Companies with significant sales to Europe also gained as expectations grew for further ECB monetary stimulus measures.

Havells India’s surged 8.1%, Motherson Sumi rose 4.7%, Dr. Reddy’s Laboratories ended up 1.2%.

Oil and Natural Gas Corp gained 2.4% on hopes of reforms on subsidies and gas prices ahead of the government’s stake sale expected later this year.

Defence equipment makers rallied after the Department of Industrial Policy and Promotion on Tuesday issued the final notification on an increase in foreign direct investment announced by the government earlier this month.

Astra Micro Wave Products gained 8.1%,Bharat Electronics advanced 17.9% while

BEML added 5%.

Meanwhile, Indian TV news channel operators surged on strong buying from domestic high networth individuals, multiple dealers said.

TV Today Network gained 20%, while New Delhi Television ended up 12.4%.

Among stocks that fell, Kotak Mahindra Bank declined 1.3% after investment bank Macquarie downgraded the stock to “neutral” from “outperform”, citing “massive outperformance” in its shares recently.

Rupee ends flat

The rupee ended steady yesterday as optimism over continued foreign investments in domestic markets was offset by caution ahead of key indicators this week, including economic growth data.

Expectations of further monetary stimulus in the eurozone have boosted emerging market assets by raising hopes of continued foreign purchases, although some of those gains are being offset by the dollar’s rise against major currencies.

Foreign institutional investors have bought a net $29.79bn in debt and shares so far this year, helping lift Indian markets.

The NSE share index, which hit a string of all-time highs recently, ended at a record closing high yesterday.

The partially convertible rupee closed at 60.45/46 per dollar compared with 60.4335/4450 in the previous session.

The dollar remains strong, hitting a 13-month high against a basket of major currencies.

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