Mumbai: Markets rose more than 1% on Monday as surprisingly robust US jobs data added to investor confidence about a turnaround in the world economy and bolstered the outlook for foreign fund investments.
Improving prospects for domestic growth and rising portfolio inflows have helped the benchmark stock index post five consecutive weekly gains, the longest run in a year.
Piramal Healthcare rallied more than 7% after the drugmaker said on Saturday it would buy a 5.5% stake in Vodafone’s India unit from Essar for Rs 3000 crore ($616.14 million).
The main 30-share BSE index was up 1.17% at 17,812.28 by 10:59am, with 29 of its components advancing.
The benchmark has gained 15% this year, with foreign funds pouring more than $3 billion into the market. In 2011, the index fell a quarter as foreign portfolio investors pulled out a net $500 million.
”It’s a liquidity-driven rally, reflecting positive sentiments globally,” said Suresh Parmar, associate vice president, institutional equities at KJMC Capital Markets.
”Though the outlook is positive, people are cautious at these levels. There can be some profit-taking during the day or in a couple of sessions.”
Lenders led the rise with State Bank of India rallying 3.5% and ICICI Bank up 1.9%.
Alex Mathews, head of research at Geojit BNP Paribas Financial Services, said a reprieve for a top minister in the federal coalition government in a telecoms corruption scandal helped ease worries of political uncertainty.
An Indian court dismissed a petition on Saturday accusing Home Minister Palaniappan Chidambaram of signing off on the sale of telecoms licenses at below-market prices that may have cost the government up to $36 billion in lost revenues.
”The court’s ruling has sent positive vibes to the market,” Mathews said. ”However, the market is due for a correction. It has been heavily over-bought. Concerns over Greece debt also lingers.”
Greece’s coalition members must tell the European Union by noon on Monday (1000 GMT) whether they accept the painful terms of a new bailout worth 130 billion euros in order to avoid a disorderly default.
The 50-share NSE index was up 1.11% at 5,384.55, with 44 of its components advancing.
In the broader market, there were 1,168 gainers against 230 losers on volume of 212.3 million shares.
Elsewhere in Asia, the MSCI’s broadest index of Asia Pacific shares outside Japan rose 0.27%, while Japan’s Nikkei rose 1.02% on the strong US data.
The US economy created more jobs in January than even the most optimistic forecast, adding to a sense the global economy started the year in better shape than hoped, especially with new signs of life in Europe.
STOCKS
IL&FS Transportation Networks Ltd rose more than 7% it got an 18.18 billion Indian rupees ($373.38 million) road contract from the National Highways Authority of India
Power Finance Corporation climbed more than 4% after the state-run lender to power projects reported a 68.13% jump in October-December profit.