Mumbai: Indian shares climbed to their highest in one-and-a-half months on Wednesday as investors focused on the rapidly growing economy, with concerns easing about the debt problems in Europe.
The market has been underpinned by a revival in buying by foreign funds as risk appetite returned globally, traders said. Financials were among the big gainers after higher quarterly tax payments by companies reinforced expectations for robust earnings growth and greater demand for loans.
Leading truck and bus maker Tata Motors (TAMO.BO), which also makes cars, raced 2.4% after the company said late on Tuesday global vehicle sales in May jumped 50% from a year earlier.
By 10:42am, the 30-share BSE index was trading up 0.31% at 17,466.70, with 18 of its components gaining. The benchmark rose as high as 17,530.38 early, climbing past 17,500 for the first time since 3 May. The 50-share NSE index was up 0.1% at 5,227.40.
“Mostly higher advance tax figures and firm global markets are driving our market higher,” said Surekha Joshi, senior dealer for institutional equities at SPA Securities.
A government source told Reuters on Tuesday Reliance Industries and Tata Motors paid double the advance tax for the June quarter than a year before while Tata Steel’s payment was 30% higher.
Foreign funds have moved about $439 million into Indian equities in June after pulling out nearly $2 billion in May. The revival in inflows has lifted the main index nearly 3%.
Ambareesh Baliga, vice-president of Karvy Stock Broking, said foreigners were returning but there was still some worry about possible adverse newsflow from the euro zone.
Leading lender State Bank of India was up 0.1% while rivals ICICI Bank and HDFC Bank rose 0.5% and 0.8% respectively.
Export-focused software companies rose on improving order visibility, dealers said.
Sector leader Tata Consultancy Services rose 1.2% while Infosys and Wipro climbed 0.7% and 1.3% respectively.
Energy giant Reliance Industries, which has the highest weight on the Sensex, shed 0.3% after rising nearly 7% in the last five sessions.
In the broader market, gainers were nearly double the number of losers on volume of 129 million shares.