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Equities

India shares rebound as HDFC Bank rises to record

Easing concerns over Italian political stalemate boosts regional indexes

MUMBAI (NewsRise) -- Indian shares rebounded Thursday as HDFC Bank rose to a record and concerns over the Italian political front eased.

The BSE Sensex advanced 1.2% to 35,322.38 and the Nifty 50 Index climbed 1.2% to 10,736.15, ending a two-day losing run. Heavyweight HDFC Bank gained 4.4% to all-time highs, a day before foreign institutional investors are allowed to buy the stock. The permission for purchases by FIIs coincides with India's capital regulator discontinuing with the Foreign Institutional trading series. This FII Trading Window, as it was popularly known, allows foreign investors to buy and sell among themselves shares of companies whose foreign investment ceiling has been reached.

"The scrapping of the FII Trading Window will increase the quantum of buying that will come in on 1st June," Macquarie said in a note, estimating more than $1 billion of FII buying on Friday.

Investment limits by FII's in HDFC Bank are usually full as the lender is highly favoured by overseas investors. The move to stop the FII Trading Window is expected to further boost demand for the stock.

Most regional markets gained amid hopes that the political impasse in Italy would be resolved. The Dow Jones Industrial Average, overnight, recouped three-fourth of its Tuesday's losses amid expectations that new elections could be avoided with the country's biggest party renewing attempts to form a coalition.

Italy's 10-year borrowing cost fell more than 30 basis points on Thursday and the euro was last trading at 1.17 against the dollar after having fallen to near 1.15 in the previous session.

Among regional indexes on Thursday, the Hong Kong benchmark index advanced 1.4%, China's gauge jumped 1.9% and South Korea's index rose 0.6%. The Nikkei Asia300 Index of companies added 0.8%.

Meanwhile, India is scheduled to release its March quarter GDP data later Thursday. Economists polled by Reuters expect the January-March GDP growth to rise to 7.3% from 7.2% in the prior quarter.

Thursday marked the expiry of Indian monthly derivatives contracts for the month of May.

After HDFC Bank, Mahindra & Mahindra was the top performer on the Sensex on Thursday, adding 3.1%. In an interview to BloombergQuint, the group's finance chief said that he expects tractor sales to grow by 8% to 10% for the next three years.

State-run Oil & Natural Gas advanced 2% after reporting a 36% increase in net profit for the March quarter.

ICICI Bank edged 0.2% higher, reversing a 2.1% intraday decline, after the lender's board ordered a probe into a complaint received from a whistle-blower against CEO Chanda Kochhar, alleging non adherence of code of conduct and conflict of interest in disbursing of loans. The board's direction comes after India's market regulator last week served a notice to ICICI Bank and Kochhar, related to disclosure norms in dealings with Videocon Group.

Atlanta closed down by the maximum permissible 20% after the construction engineering company said its auditor Price Waterhouse Chartered Accountants had resigned.

Punj Lloyd surged13% after the infrastructure company swung to a profit in the January-March period.

--Nimesh Vora

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