Indian Shares End Higher

Indian Shares End Higher

MUMBAI – Indian shares ended slightly higher Wednesday, tracking gains in some regional markets like Australia and Hong Kong and helped by positive stock openings in Europe.

On the Bombay Stock Exchange, the benchmark Sensitive Index, or Sensex, ended higher by 45.78 points, or 0.2%, at 18869.69 points. On the National Stock Exchange, the 50-share Nifty index gained 12.45 points, or 0.2%, to close at 5731.25 points.

Shares of companies with small to medium market capitalization outperformed the blue-chip indexes -- the BSE Small Cap index rose 1.0%, while the BSE Mid Cap index gained 0.6%.

According to Vijay Kedia of Kedia Securities, smallcap and midcap shares will likely outperform the broader market in the next month after being neglected. Also, with companies announcing quarterly financial results from next week, investors are likely to slow purchases of large-cap shares, he added.

India's blue-chip indexes have gained about 9% over the past month, helped by the government's announcement of reforms, such as allowing more foreign investment in retail and aviation, and increasing the subsidized price of diesel. The moves are aimed at accelerating economic growth, which has slowed to its weakest pace in nearly a decade. New Delhi has also promised more pro-business steps.

"We are still bullish on consumer-oriented stocks, including housing, as investors in stocks wait for more reforms," Mr Kedia said.

According to dealers and analysts, the market will be wary of cuts in the region's economic-growth expectations.

The Asian Development Bank Wednesday slashed its forecasts for growth in emerging Asia, highlighting a significant slowdown in the region's giants, China and India.

In an update to its Asian Development Outlook, the bank forecast gross domestic product in developing Asia to expand 6.1% in 2012, compared with the 6.9% that it projected in April, and 6.7% in 2013, versus 7.3% in its earlier report. The ADB downgraded its estimate on India to 5.6% growth from 7.0% for 2012, and to 6.7% from 7.5% for 2013.

On Wednesday, shares of energy-focused Reliance Industries rose 1.4% to 846.25 rupees, while consumer-staples company Hindustan Unilever gained 2.4% to 555.50 rupees.

Among midcap shares, Tata Global Beverages rose 6.6% to end at 154.90 rupees. The company's joint venture with U.S.-based Starbucks is set to open its first coffee shop in India by the end of October.

Among smallcap shares, construction and engineering firm IVRCL closed 4.6% higher at 50.80 rupees.