Indian shares rise 2.2% on global bank action

Indian shares surged 2.2 per cent yesterday to their best close in two weeks as investors bet on a revival in foreign fund buying after moves by six major central banks to boost cash supplies to troubled European banks. Oil and gas major Reliance Industries, No 2 lender ICICI Bank and software services bellwether Infosys, which together account for more than a quarter of the benchmark index, led the rally. Ranbaxy Laboratories closed up 2 per cent after the US Food and Drug Administration said it had given approval to the drugmaker to make the first generic version of the cholesterol-lowering drug Lipitor. Sustainability in doubt The main 30-share BSE index rose 2.23 per cent, or 359.99 points, to 16,483.45, its highest closed since November 16, with all but five of its components rising. The benchmark, which had slid 8.9 per cent in November and is down nearly a fifth in the year to date, gained as much as 3.7 per cent in opening deals and analysts said it would be difficult to sustain the rise unless foreign funds pour money in. "The gains that we saw today sets the market up for profit-taking because the fundamentals have not changed," said Stephen Pope, managing partner at UK-based market research and consulting firm Spotlight Ideas. "In India, there are ongoing difficulties in terms of inflationary pressure and the inability of the government to kickstart the reforms process," he said, adding the Eurozone debt crisis would continue to weigh on the sentiment. The US Federal Reserve, the European Central Bank and the central banks of Canada, Britain, Japan and Switzerland said in a joint statement on Wednesday they had agreed to provide cheaper dollar funding, boosting global markets.