Mumbai: Indian shares rose for the third straight session and closed at their highest in more than three months on Monday, riding on the wave of earnings optimism as the season kicks off on Tuesday.
Infosys Technologies, India’s No. 2 software firm, tested new highs for the second straight session on expectations it would raise its dollar revenue forecast for the full year when it unveils results before market opens on Tuesday.
The IT bellwether, generally believed to be the trendsetter for its sectoral peers, had also hit new highs ahead of its quarterly earnings announcements in 2010.
“From Q1 (first quarter) perspective, we expect strong volume growth from Infy, TCS and Hexaware,” Bank of America-Merrill Lynch said in a note seen by Reuters.
Infosys shares rose as much as 1.4% to its all-time high of Rs2,911.55.
The 30-share BSE index .BSESN closed 0.58% or 103.66 points higher at 17,937.20 points, with 17 of its components closing in the green.
It rose to 18,010.07 in early trade, its highest since 7 April , but closed off highs on a lower-than-expected growth in May industrial output.
Vaibhav Sanghavi, director of Ambit Capital expects Sensex to be in the range of 20,000-22,000 at end-March 2011, but did not rule out volatility in the near term due to global events.
“There may be global jitters. But the India story is still on. Monsoon is good, June quarter earnings are expected to be decent,” said Sanghavi.
For Sanghavi’s detailed views to Reuters Insider on April-June earnings and sectoral picks, view show:
Industrial output in Asia’s third-largest economy rose at its slowest pace in seven months in May, but the slower-than-forecast growth is not expected to stop the central bank from raising interest rates later this month.
Foreign funds have poured in around $6.8 billion so far in Indian equities in 2010, a portion of which was absorbed by primary market issuance.
In 2009, foreigners had bought a record $17.5 billion of stocks and powered the index up 81%.
India’s benchmark is up 2.7% year-to-date and has performed better than the broader MSCI Asia ex-Japan, which has dropped 6.2% so far this year.
Infosys closed 0.8% higher while rivals Tata Consultancy Services and Wipro climbed 2.2% and 2.3% respectively.
Financials gained on expectations that robust economic growth in the world’s second-largest fastest growing major economy after China, would trigger higher demand for loans.
Commerce minister Anand Sharma told Reuters on Friday India’s gross domestic product growth is expected to return to ”9 percent plus” this year, led by strong corporate performance and rising savings levels.
Leading lender State Bank of India rose 1.3% while rivals ICICI Bank and HDFC Bank were up 2.1% each. Mortgage lender Housing Development Finance Corp climbed 1.2%.
State-run oil firms dropped as traders booked profits after the recent steep gains in the pack, following the government’s move towards deregulating fuel prices on June 25, dealers said. Explorer Oil & Natural Gas Corp dropped 1.4%.
It has gained 7.4% since the close of 24 June. Oil marketing companies Bharat Petroleum Corp, Hindustan Petroleum Corp and Indian Oil Corp shed between 2.1% and 3%.
Advancing shares outpaced declining ones in the ratio of 1.2:1 in a relatively better volume of 425 million shares. The 50-share NSE index rose 0.6% to 5,383 points.
Leading telecom companies Bharti Airtel and Reliance Communications dropped 0.9% and 1.4% respectively. Last Friday, they had gained 9.7% and 2.8% respectively, as investors cheered an upgrade by Credit Suisse.
Road builder Jaypee Infratech closed 0.2% higher at Rs688.45, after it posted a net profit of Rs3.95 billion for the quarter ended June. The year-ago comparable was not immediately available. The company made its debut on the Indian bourses in late May.