Stocks in Indian rose sharply on Wednesday, trading back above the psychologically important 15,000 level after market speculators covered big short positions. However, the gains may be short-lived after India's central bank raised interest rates for the first time in 15 months to combat rising inflation caused by soaring food and energy prices.
The Reserve Bank of India hiked the repurchase rate, which is the rate commercial banks borrow funds from the central bank, to 8% from 7.75%. The decision was announced after the Indian markets were closed.
"Inflation was becoming a major concern for the central bank. We could see a knee-jerk reaction to this move in the stock market tomorrow," said Jayesh Shroff of SBI Asset Management.
The Bombay Stock Exchange's Sensex Index rose 296.07 points, or 1.99%, to 15,185.32. Here's a look at how some India-based American depositary shares traded in the U.S. on Wednesday.India's largest private sector bank, ICICI Bank (IBN), announced it will cut 1,000 jobs at various levels as the company moves to get rid of poor performers and hire 2,500 people for entry-level positions in the next 90 days. The company denied rumors that the cuts were done to help save costs. American depositary shares of ICICI Bank, which trade on the NYSE, lost 4.5% to $32.63. Indian information technology firm Infosys Technologies (INFY - Get Report) announced it has been presented with two prestigious awards by The Banker Technology Awards for the company's outstanding work in the fields of wholesale and capital markets. The company won the 2008 Offshoring and Outsourcing Project of the Year award and the 2008 Payment & Treasury Service Project of the Year award. Shares of Infosys fell 1.84% to $44.89.