Mumbai: Indian shares erased early losses and rose 0.2% on Wednesday, with export-focused outsourcers leading the way on expectation a recovering world economy will boost demand for their services.
Bellwether Infosys Technologies, which gets more than half its revenue from exports, leapt to an all-time high of Rs2,549, before closing up 1.5% at 2,544.80. The stock was the top gainer in the main index.
A senior Infosys official told Reuters on Tuesday the company expects revenue growth in the fiscal year starting in April to be better than 2009/10 as a recovery in the global economy spurs investments by its clients.
Smaller rival Wipro ended up nearly 2% at 671.90 rupees after hitting 674.90, its highest level since 2000. Leader Tata Consultancy rose 1.8% to 713.45.
“IT stocks are gaining on hope the global economy is recovering,” said Daljeet Kohli, head of private client group research at Emkay Global Financial.
The 30-share BSE index closed up 0.21%, or 35.61 points, at 16,912.77 after falling 0.6% in early deals. Fourteen of its components advanced. The benchmark is up more than 75% so far in 2009, on track to post its best gains since 1991, fuelled by strong foreign portfolio investment. The 50-share NSE index closed 0.2% higher at 5,042.05.
“People will be looking for growth assets and I don’t think there are too many interesting opportunities like India,” said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services.
“There is ample liquidity here in India as well as globally.”
Top mobile operator Bharti Airtel closed 2.8% higher at Rs325.75, after the Bangladeshi telecom regulator said the company may be looking to buy Warid Telecom.
However, banks extended losses on fears the central bank may tighten policy sooner than expected given concerns about rising inflation.
The Reserve Bank of India might tighten monetary policy in December as inflation could rise to near 7% in March, the prime minister’s economic adviser, C. Rangarajan, was quoted as saying in a report.
Top lender State Bank of India fell 1.3%, while ICICI Bank and HDFC Bank shed 0.3% and 0.4% respectively.
Tata Steel climbed 2.1% to Rs557.55 after its European unit Corus said it had got 350 million euro contract to supply rail tracks to French operator SNCF.
In the broader market, losers almost equalled the number gainers on low volume of 313 million shares.