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India shares post gains as drug makers, ITC advance

MUMBAI (NewsRise) -- Indian shares rose Wednesday, helped by gains in pharmaceutical stocks and a rebound in ITC from a slump triggered by higher taxes on cigarettes.

The benchmark BSE Sensex added 0.8%, or 244.36 points, to 31,955.35 points, while the broader Nifty 50 index rose 0.7%, or 72.45 points, to 9,899.60 points. Aurobindo Pharma, a constituent of the Nifty, rose 4.5% to an over eight-month high after the U.S. Food and Drug Administration gave its final nod to manufacture a drug for a chronic kidney disease. Cadila Healthcare added 3.7% following the U.S. launch of its medicine to treat ulcerative colitis.

The optimism over regulatory approvals also lifted other stocks in the sector. Sun Pharmaceutical Industries gained 1.8% after the FDA approved Abbreviated New Drug Application for Paroxetine Hydrochloride. Lupin also ended up 1.5% after reportedly receiving approvals for Armodafinil, used to treat excessive sleeping disorder.

ITC rose 2.4% after a plunging almost 13% Tuesday following New Delhi's move to raise taxes on cigarettes under the recently-implemented Goods and Services Tax.

Most other regional indexes also edged higher as expectations of a gradual pace of rate increases in the U.S. damped demand for the dollar and drove U.S. Treasury yields lower. Gains in Asia followed a record high closing overnight for the technology-heavy Nasdaq Composite. The Nikkei Asia300 Index, which tracks more than 300 companies in the region, rose 0.6%.

"We are still in a bull market thanks to sustained foreign portfolio inflows into Indian stocks. Though most stocks, at this point, look overvalued," said Akash Jain, vice president for research at Ajcon Global. "That explains the appetite for pharma stocks that have been largely unvalued so far."

Twenty four of the 30 Sensex constituents ended higher on Wednesday, while overall advancing issues outnumbered declining ones 1,714 to 971 while 168 remained unchanged.

India's largest telecom network operator Bharti Airtel advanced 3.2% and smaller rival Idea Cellular jumped 9% amid reports the two companies and Vodafone India have suggested nearly doubling the interconnect usage charge. The IUC is a fee a service provider pays another to link a call to the latter's network.

Software exporter Infosys declined 0.6% to 979.90 rupees amid reports its Executive Vice-President Ritika Suri resigned. Suri's reported resignation comes amid a spate of leadership changes under chief executive officer Vishal Sikka.

Tata Consultancy Services, which reported lackluster June-quarter earnings last week, rose 1.9%. Wipro ended up almost 1% ahead of its June quarter earnings on Thursday. The company is also expected to take a decision on its proposed share buyback at the board meeting.

Hindustan Unilever ended 0.5% lower after rising as much as 3.2% to a record 1,195.10 rupees following a better-than-expected 9% on-year increase in first-quarter net profit.

State-run Canara Bank ended up 0.6% ahead of its June quarter earnings. After market hours, the bank reported a lower-than-expected 10% rise in quarterly profit, weighed by a 55% jump in provisions for bad loans.

Software services provider Mastek surged the daily limit of 20%, after first-quarter net profit jumped more than six-fold, while Sterlite Technologies surged 9% after April-June profit increased 61% on-year.

--Dhanya Ann Thoppil

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