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Mumbai: Indian shares rose 1.25 per cent on Tuesday , led by Reliance Industries and Larsen & Toubro, but investors were unconvinced by the gain given worries about growth and inflation, and global credit market problems.
Larsen & Toubro, India's top engineering and construction company, staged a strong recovery to end up 6.9 per cent at Rs2,917, having fallen 8.7 per cent on Monday after three brokerages said a unit might book a loss on commodity hedging.
State-run power equipment maker Bharat Heavy Electricals gained 4.3 per cent to Rs1,992.70.
"There has been a large amount of short covering in the market today, and we saw some buying by domestic mutual funds," said Amitabh Chakraborty, president at Religare Securities.
Concerns
"But the underlying concerns persist as to how will India maintain its GDP growth. Rising inflation is a big worry as food [prices] are going up and up," he said.
The benchmark BSE 30-share index rose 199.43 points to 16,123.15, with 20 components gaining, but is still almost a quarter below a life high of 21,206.77 hit on January 10.
In the broader market 2,101 gainers defeated 605 losers on volume of 363 million shares.
Top vehicle maker Tata Motors ended down 2.3 per cent at Rs658.55, their lowest close since January 22.
The company, which is negotiating to buy Ford Motor Co's Jaguar and Land Rover brands, said it said it would raise up to $1 billion to help fund its acquisition plans.
The largest listed company on Sensex, Reliance Industries Ltd, rose 3.2 per cent to Rs2,346.55, mostly on short covering, traders said. The stock has lost more than 18 per cent this year.
The 50-share NSE index rose 1.36 per cent to 4,865.90.
Data today is forecast to show India's industrial output in January grew an annual eight per cent, marginally stronger than the previous month.
State-run gas transporter GAIL (India) Ltd ended 6.8 per cent higher at Rs420.60 after its chief executive said the company would consider a bonus issue of shares in two-three months.
Orbit Corp jumped 10.8 per cent to Rs532.90 after the real estate firm sold a stake in a unit, Orbit Highcity Pvt Ltd, to Cyprus-based Rodere Holdings for Rs2 billion.
Meanwhile, the rupee rose for a second day as a rebound in the stocks spurred speculation overseas investors will return to buy equities.
The rupee rose 0.1 percent to 40.4575 against the dollar at the 5pm close in Mumbai, according to data compiled by Bloomberg. It earlier fell as much as 0.3 percent to 40.605.
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