Mumbai: Shares climbed 1.6% on Wednesday, propelled by financials such as HDFC Bank , ICICI and State Bank as risk appetite improved globally.
Quarterly results that showed the outlook for companies was not as bad as feared also underpinned the market, traders said.
Hero MotoCorp, India’s largest motorcycle maker, rallied nearly 5% after it beat street estimates with a 19% rise in quarterly profit and said it was confident of boosting sales despite concerns over rising inflation and fuel costs in Asia’s third-largest economy.
“The results that have come till now suggests that the problems are not as much as originally feared. That has given some confidence,” said Jagannadham Thunuguntla, head of research at SMC Global Securities.
By 11:17 am, the main 30-share BSE index was up 1.58% at 17,012.47 points with all its components advancing.
HDFC Bank, the country’s No. 3 lender that reports quarterly results on Wednesday, was up 2.6% at Rs489.4. The bank is expected to post a 27% rise in profit for the three months ended 30 September.
Bigger rivals State Bank was up 2.3% and ICICI gained 2.6%.
Tata Motors, India’s largest truck maker, rose 3.6% on hopes for improving sales. The company, which also owns the premium Jaguar and Land Rover brands and the Nano, one of the cheapest car, had last week reported a 24% rise in global September sales.
“The numbers have been quite good. That should be seen as a kind of game changer for Tata Motors because in this kind of an environment they are having robust sales both for JLR as well as domestic brands,” said Deven Choksey, CEO and managing director of K.R. Choksey.
Sales of Jaguar Land Rover rose an annual 42% in September.
Still, the outlook for the market remains clouded by economic concerns. The Reserve Bank of India (RBI) is widely expected to deliver another rate rise next Tuesday before pausing. It has already increased rates a dozen times since mid-March 2010 to fight high inflation.
The BSE index has risen 1.8% since the end of September, but is down 18% this year as high borrowing costs squeezed corporate profits and a series of government scandals paralyzed government policy making.
The 50-share NSE index was up 1.56% at 5,115.6 points.
In the broader market, there were 1083 gainers for 266 losers on total volumes of 177.79 million shares.
Asian shares rose on Wednesday, but gains were capped by a cut to Spain’s sovereign credit rating from Moody’s Investors Service that kept investors’ risk appetite in check.
A rise in US stocks and a report that Europe will strengthen the region’s rescue fund helped improve sentiment, with spreads over a key Asian credit default swaps index narrowing several basis points.
The MSCI’s broadest index of Asia Pacific shares outside Japan was up 1.41%, while Japan’s Nikkei up 0.18%.
Stocks on the move
• Power utility and infrastructure developer GVK Power and Infrastructure rose as much as 3.4% after the firm said its unit acquired 13.5% stake in Mumbai International Airport for $231 million.
• Construction firm IVRCL Ltd rose more than 5% after it said it got orders worth Rs552 crore.
• Fertilizer maker Coromandel International rose more than 5% after it said late on Tuesday its board approved one-for-one bonus issue of debentures worth Rs15 each.