Mumbai: Indian shares posted the biggest weekly gain since early March, as they climbed 1.2% on Friday, joining a global markets rally triggered by bargain hunting after China’s assurance that Europe will remain a major investment market.
Metal makers Tata Steel, Hindalco and Sterlite Industries gained the most driven by firm metal prices in London as copper prices touched a two-week high.
The 30-share BSE index rose 1.18% or 196.66 points to 16,863.06 points. It rose 2.5% this week, the most since the week ended March 6, when it registered a 3.6 pct gain. The 50-share NSE index gained 1.3% to 5,066.55.
Twenty six components of the index closed in the green.
But the benchmark is down nearly 4% in May and is set to post its first monthly loss since January, as foreign funds pulled out $2.3 billion from Indian equities this month.
“The bad news was overdone. The Europe debt woes are more than factored in,” said Neeraj Dewan, director of Quantum Securities, ruling out any steep downside from current levels.
Foreign funds are still net investors of $4.3 billion since January, after record inflows of $17.5 billion in 2009 that led to a spectacular 81% rally in the benchmark last year.
The BSE Sensex has fared better than its peers such as China’s Shanghai Composite Index which dipped 7.5% in May and Brazil’s Bovespa stock index which shed 8.1%.
“Monsoon is a key factor to watch now. A lot depends on that,” said Quantum Securities’ Neeraj Dewan. Investors are keenly awaiting the June-September monsoon, which is vital for farm output, rural incomes and is a key driver of demand for a wide range of manufactured goods.
The annual monsoon, halted by cyclone Laila last week, is likely to hit the country’s southern coast on schedule in the next three to four days, weather officials said on Thursday. Last year, India suffered its worst drought since 1972, despite a forecast for a normal monsoon.
Tata Motors rose as much as 4.2% after the top vehicle maker beat market estimates with a surge in March quarter earnings, helped by rising sales and profitability at its Jaguar Land Rover unit.
But the stock erased early gains and closed 0.7% higher.
Non-ferrous metals producer Sterlite Industries and aluminium maker Hindalco rose 5.8% and 1.6% respectively. Tata Steel, the world’s eighth-largest steel maker by output, climbed 0.6% while Jindal Steel & Power gained 4.9%.
Late on Thursday, Tata Steel said its founder Tata Sons is hiking its stake in the steel maker and the company had approved issuing up to 15 million shares and 12 million convertible warrants.
Energy major Reliance Industries rose 1.2% as it said it had discovered oil in one of it’s exploration blocks in the Cambay Basin on the country’s western coast, which is its fifth oil discovery in the region.
In the broader market, more than two shares advanced for every one that declined, on relatively lower volume of 352 million shares.
Global equities measured by the MSCI All-Country World Index advanced 0.9%, gaining for the third consecutive day.