Stocks in Indian rose sharply on Tuesday, led by banking and realty shares on reports that advanced tax collections for the April-to-June period are up significantly.
According to the Economic Times, India's biggest mortgage player, Housing Development Finance, announced that its tax payments jumped 47%, ICICI Bank (IBN) saw its payments surge 36%, the State Bank of India said payments soared 32%, and HDFC Bank (HDB) paid 40% more.
Short-covering propelled Indian shares higher as analysts perceived the jump in tax collections as a precursor to stronger corporate earnings reports for the upcoming June period. However, some market observers in the region said the fundamentals didn't support strong earnings, and the market moved up on light volume.
"This is clearly a relief rally, as the combination of macroeconomic factors -- inflation, price of oil, value of the rupee, high interest rate scenario and possibility of another hike, amid a dip in economic growth is lethal. And even the slightest negative news from markets overseas will aggravate the situation. I see no reason for this rise except the possibility of some manipulation," said Daljeet Kohli, head of research at Emkay Share and Stock Brokers.The Bombay Stock Exchange's Sensex Index soared 301.08 points, or 1.96%, to 15,732.75. Here's a look at how some India-based American depositary shares traded in the U.S. on Tuesday. Tata Communications (TCL), an Indian communications solutions provider, announced a sharp drop in its fourth-quarter net profit due to slower sales growth. The company said fourth-quarter net profit came in at 103 million rupees ($2.4 million), vs. 154 million from a year ago and total revenues were 85.7 billion rupees, vs. 88.49 billion a year ago. American depositary shares of Tata, which trade on the NYSE, traded up 4.1% to $20.27.