Talk on bank reserves spurs Indian shares

Mumbai Most Indian stocks rose, tracking Asian equities, amid speculation slowing economic growth may prompt the central bank to cut reserve requirements for banks. Tata Consultancy Services Ltd., Infosys Ltd. and Wipro Ltd., India\'s biggest software makers, were among the biggest gainers on the benchmark equity index. Coal India Ltd. rose the most in a week after earnings at the world\'s top producer of the fuel exceeded analysts forecasts. The BSE India Sensitive Index, or Sensex, rose 0.1 per cent to 16,438.58 at the close, the highest level since May 9. Asia\'s third-biggest economy likely expanded 6.7 per cent in the year ended March, from 8.4 per cent a year earlier, according to a Bloomberg survey before a May 31 report. Brent crude has slid 15 per cent since March, paring costs for a nation that imports 80 per cent of its oil. \"A drop in oil prices gives the central bank headroom to cut the reserve ratio as well as the lending rate next month,\" Gaurang Shah, assistant vice president at Geojit BNP Paribas Financial Services Ltd., said by telephone from Mumbai Tuesday. The Reserve Bank of India has reduced the amount of funds lenders must set aside as reserves twice this year. Last month, the bank cut its benchmark rate for the first time since 2009 while flagging price pressures from the currency and oil costs. Inflation unexpectedly accelerated to 7.23 per cent in April. The Sensex has retreated 11 per cent from its February 21 high, while the rupee has lost 9 per cent this quarter as a shortfall in government finances.