Mumbai: Indian shares rose 1% on Friday, notching up their second straight weekly gain, as strong corporate earnings reinforced expectations for an economic rebound.
Maruti Suzuki raced to an all-time high, a day after the leading carmaker reported an unexpected 25% jump in quarterly profit on higher sales and lower raw material costs.
Top telecom firm Bharti Airtel bounced 2.1% to Rs415.50 as a two-for-one stock split took effect, after falling 1.1% the previous day following a drop in a key measure of growth although the company posted a forecast-beating 24% jump in quarterly profit.
No. 1 utility-vehicle maker Mahindra & Mahindra, top vehicle maker Tata Motors and outsourcer Infosys Technologies were among the other major gainers.
“Over the past few days, we are seeing that global sentiment has improved, and the quarterly results have exceeded expectations,” A.N. Sridhar, fund manager at Sahara Mutual Fund, said.
“Everyone thought the results will be better than the previous quarter, but no one expected them to be so much better.”
The BSE index, Sensex, ended up 0.97%, or 147.92 points, at 15,378.96, with 23 stocks advancing, after falling as much as 0.4% and rising 1.2% at one stage.
Out of the 12 companies in the 30-share index that have reported results, 10 beat analysts estimates, and all but one posted higher quarterly earnings.
The benchmark rose 4.3% on the week, after jumping 9.2% last week, as efforts by governments around the world to pump trillions of dollars into corporate rescues and economic stimulus measures appeared to be bearing fruit and spurred a global equities rally.
Oil and Natural Gas Corp erased losses of as much as 1.8% and ended up 3.1% at Rs1,126.20, after the state-run explorer posted a fourth straight decline in quarterly profit, but beat estimates.
The BSE index has outperformed most other major benchmarks across the globe, soaring 91% from a 2009 low in early March. It is up 59.4% this year - the fourth-best performance among major world benchmarks tracked by Reuters - after plunging by more than half in 2008.
This has stoked concerns about rich valuations, but analysts say the slew of strong corporate results will spark further earnings upgrades and justify shares prices.
Though the market may consolidate in the short term, increasing signs of a recovery in the domestic as well as global economy keep long-term prospects bright, analysts said.
“The latest quarterly results have shown that most companies are exceeding analyst estimates, and this means the domestic economy is doing well,” said Gopal Agrawal, head of equity at Mirae Asset Global Investment Management.
“So if there is a global revival, India will be much better off than others.”
Maruti Suzuki shot to a record high of Rs1,397.50, before falling back to end up 6.4% at 1,377.85, extending gains for the week to 16.3%.
No. 2 IT-services firm Infosys firmed 2.2% to Rs2,003.35, while ONGC rose 3.1% to Rs1,126.20.
Mahindra & Mahindra climbed 3.6% to Rs830.85, while Tata Motors advanced 9.7% to Rs373.50.
The auto sector jumped 9.4% on the week.
Reliance Industries, India’s largest listed firm with the most weight in the main index, fell 1.2% to Rs2,013.75 ahead of its quarterly results. But the stock ended the week up 4.2%.
In the broader market, gainers led losers 2 to 1 on relatively heavy volume of 517.8 million shares.
The 50-share NSE index, Nifty, rose 1% to 4,568.55.
Asian shares were higher, with Japan’s Nikkei rising 1.55%, while MSCI’s measure of other Asian markets was up 0.6%.
At 1038 GMT, the FTSEurofirst 300 index of top European shares was up 0.3%.