Mumbai: The BSE Sensex climbed for the third session in four on Wednesday, tracking firm markets elsewhere ahead of an expected announcement by the Federal Reserve that it will pump in more stimulus to nurse a US fragile recovery.
Financials topped the gainers list, a day after the Reserve Bank of India raised interest rates but said it was likely not to make further rate moves for the next three months.
India’s services sector expanded last month at a faster rate than in September, bringing an end to a 3-month decline in the key business activity index, a survey showed.
The 30-share BSE index gained 0.59% or 120.05 points to 20,465.74 points, with 21 of its components ending higher.
The Sensex is around 750 points away from its all-time high seen in Januray 2008.
”I don’t see much downside risk to the market,” said Prasanth Prabhakaran, president of retail broking at IIFL.
”The quarterly results were largely in line. RBI’s action yesterday was also on expected lines. Coal India money should return to the market now,” he said.
Coal India’s $3.5 billion initial share sale, which concluded last month, generated orders of around $50 billion. The stock makes its trading debut on Thursday.
Net foreign fund investment in Indian equities has totalled a record $26.1 billion year to date, driving the benchmark index 17.2% higher.
India, Thailand, and Singapore exchange traded funds posted the largest inflows among Asian markets in October, while China, Hong Kong, and Taiwan saw the largest outflows, TrimTabs said in a note on Tuesday.
The US-based research firm expects foreign capital to continue chasing emerging markets equities against a backdrop of an expected second tranche of quantitative easing by the Fed.
India’s banking sector index rose as much as 1.3% to an all-time high on Wednesday.
Top lender State Bank of India rose 2.2% while leading private sector lenders ICICI Bank and HDFC Bank gained 0.6% and 0.2% respectively.
Vehicles maker Tata Motors gained 2.7%, continuing recent momentum amid strong demand for cars in India.
”We believe Tata Motors is attractive for multiple reasons -- uptrend in CV (commercial vehicle) cycle, ramp-up in Nano production and strong product pipeline,” Standard Chartered said in a Tuesday note, reiterating an outperform rating on the stock.
GAIL (India) erased early losses and eked out a 0.1% gain as the state-run gas transporter said its September quarter net profit increased by 30%.
Advancing shares led declining ones in a ratio of 1.3:1 in the broader market, on robust volume of 520 million shares.
The 50-share NSE index closed 0.7% higher at 6,160.50.
Elsewhere, world stocks hit a fresh two-year high, while emerging equities rose to their highest level since mid-2008.
The MSCI world equity index rose as much as 0.4 percent to a two-year high of 320.42, while the more volatile MSCI emerging equities index climbed 0.8% to 1,133.51, its highest since June 2008.
Fertiliser makers gained on robust volume, on hopes of a favourable policy announcement for de-control of urea. A government minister said India has formed a panel of government officials to study the feasibility of freeing up pricing of urea fertiliser.
Rashtriya Chemicals, National Fertilizers, Chambal Fertilisers, Nagarjuna Fertilizers, Gujarat Narmada Valley Fertilizers Coromandel International and Gujarat State Fertilizers were up between 1% and 17.5%.
Fortis Healthcare firmed 1.4% to Rs166.40 after the drugmaker said its net profit in July-September jumped almost six-fold, riding on increased revenue from international patients