Indian stocks jumped higher Thursday after government inflation readings backed off from three-year highs. India's wholesale price index rose to 7.14% in the 12 months ending April 5, compared with the prior week's rise of 7.41% and just shy of consensus forecasts of 7.19%. India's central bank also announced it's raising its cash reserve ratio to 8% from 7.5% in two phases ending on May 10.
"The action had to be done immediately and it has been done. The Reserve Bank of India's intention is to squeeze out the current liquidity," said Krish Ramkumar, of Sundaram BNP Paribas Asset Management.
Dealers in the region said the equity rally was sparked by short-covering with bearish traders heavily positioned for a higher inflation number. The Bombay Stock Exchange's benchmark 30-stock Sensex Index rose 237 points, or 1.5%, to 16,481 points. Indian equity markets will be closed Friday for a public holiday.
Bangalore-based information technology company Wipro Limited (WIT - Get Report) and U.S. software giant Microsoft (MSFT - Get Report) announced an expansion of their strategic alliance with the launch of two Wipro Centers of Excellence to display Microsoft technologies at Wipro's centers in Bangalore and Mysore, according to a company press release. American depositary shares of Wipro fell 1.1% to $11.79.Indian telecom service provider Mahanagar Telephone Nigam (MTE) said it will offer free downloadable software developed by Micro Technologies that will help customers track stolen mobile phones, according to newslocale.org. The software called Lost Mobile Tracking Systems (LMTS) can be installed on more than 250 models of mobile handsets and will debut its launch in Mumbai, Navi Mumbai and Thane. Shares of MTE finished essentially flat at $5.14. According to a report from autoindia.com, India's auto giant and largest truck maker, Tata Motors (TTM), is planning to bring to market a crossover vehicle. Sources close to the situation said the new vehicle will compete against Toyota Motor's (TM) Innova and General Motors' (GM) Chevrolet Tavera and will be produced at its plant in Pune. A Tata Motors spokesperson said, "The company, as per policy, does not share information on future product launches." Shares of Tata Motors finished essentially flat at $15.56. In the Indian financial sector, Icici Bank's (IBN) CEO Kandapur Kamath said the banking giant wasn't planning on listing its brokerage division Icici Securities any time soon. "We will look at it at an appropriate time," Kamath said to reporters at a banking conference in Mumbai, according to reuters.com. Kamath also said that Icici Bank would wait for the Reserve Bank's policy statement before making any decisions on its interest rates. The Reserve Bank is set to release its policy statement on April 29. Shares of Icici dropped 1.5% to $41.25 Be sure to check out the Far East Portfolio at Stockpickr.com every night to find out which stocks in India and China are making big moves and announcing major news.