Indian shares up after paring gains

Indian shares edged higher yesterday as auto makers advanced on hopes for lower costs for vehicle loans after the central bank cut interest rates, but doubts about future monetary easing led to profit-taking in recent outperformers. Indian markets face a number of challenges ahead, including worries that high oil prices and big borrowing plans from the government could prevent inflation from falling too much at a time when growth is slowing. That could prevent continued gains in India's main indexes, after the main market index edged up enough yesterday to book its highest close since April 4. "We don't know when the next interest rate cut is going to happen," said Sandeep J Shah, CEO of Sampriti Capital, adding that markets would now focus on earnings results, among other factors. India's main 30-share BSE Sensex index pared earlier gains to end up just 0.2 per cent at 17,392.39, while the broader 50-share NSE index rose 0.19 per cent at 5,300. Auto makers helped keep the indexes in the black, with a BSE sub-index rising to an intraday record high on hopes that the cost of purchasing a vehicle will come down, boosting sales. Tata Motors rose 2.7 per cent, after earlier hitting a record high of Rs311.25. Shares were also helped after brokerage Sharekhan said the auto maker's $490 million zero coupon convertible bonds were "in the money" for investors, saving Tata potentially costly redemption payments. Bajaj Auto ended 2.6 per cent up, while Mahindra and Mahindra rose 1.14 per cent. From gulfnews