Mumbai: Shares edged up 0.1% on Monday, as software majors soared to a record high on optimistic outlook for the sector, but upside was limited due to low activity as the year-end neared.
Hero Honda jumped 18%, its best single-day gain in at least two-year, as Bank of America-Merrill Lynch raised its rating on the top motorcycle maker to “buy” from “neutral,” with worries over the financial impact from Honda’s exit from their India motorcycle JV subsiding.
After market hours on Thursday, Hero Honda chief executive Pawan Munjal said Hero’s royalty payment to Honda would start declining from next year.
The 30-share BSE index firmed 0.12%, or 24.03 points, to 19,888.88 points, with 17 of its components declining. Indian markets were shut on Friday for a public holiday. The 50-share NSE index closed barely changed at 5,947.05 points.
“Market is just consolidating. We need to be happy about the fact that it isn’t coming off, which is a possibility when we approach a year end,” said Gajendra Nagpal, CEO of Unicon Financial.
“There are no strong positive triggers and we aren’t seeing any big bad news either.”
Market participants at large are optimistic about the prospects for 2011, backed by strong economic growth in the world’s second-fastest growing major economy.
“We should register gains in 2011, as emerging economies like India promise good growth opportunities,” said Nagpal.
In the broader market, gainers outpaced losers in a ratio of 1.1 to 1 in a low volume of 281 million shares.
Emerging market equity funds extended their inflow streak to 29-week, and for the year-to-date they have taken in almost $90 billion, global fund tracker EPFR said over the weekend.
India’s benchmark has risen nearly 14% in 2010, backed by $28.4 billion of foreign portfolio investment.
The index has outperformed Brazil’s Bovespa and China’s Shanghai Composite Index, which have dropped 0.9% and 12.9%, respectively, in the year-to-date, but fallen short of Russian RTS index’s 20.5% gain.
Oracle Corp’s and Accenture’s forecast-beating quarterly earnings last week and optimistic outlooks, lifted the mood for the software industry.
Leading outsourcer Tata Consultancy Services rose nearly 3% to a record high of Rs1,174.50, while Infosys Technologies gained as much as 2.1% to an all-time high of Rs3,363.
SKS Microfinance, the country’s only listed microfinance lender, tumbled 9.5% to a record low of Rs599 on the back of renewed fears about the sector’s future profitability.
By 04:00 pm, the MSCI world equity index was steady, while the Thomson Reuters global stock index edged 0.1% lower.
Ispat Industries soared 10.6% to Rs 24.95, as sources said JSW Steel Ltd, the country’s third-largest steel producer, is in advanced talks to buy out the controlling stake of the company’s founders.
Tata Chemicals gained 0.5% to Rs 372.85 after it said its British unit, Brunner Mond, has signed a binding agreement to acquire British Salt Ltd for 93 million pounds.
Drug firm Claris Lifesciences listed at Rs 224.4, down 1.6% from its issue price of 228 rupees a share. The stock extended losses and closed at Rs 205.85.