Mumbai: Shares climbed 1% on Wednesday, taking cues from strong Asian markets and a normal monsoon forecast that could boost the outlook for the economy.
Financials led the rally as good rains will strengthen the prospects of farm output in a country that depends on the annual monsoon for irrigation.
Bumper crops usually put more money in the hands of rural India, where most of the people live and boosts consumer spending on a wide range goods from automobiles to television sets. Higher farm output could also ease inflation pressures in Asia’s third-largest economy.
HCL Technologies , the country’s fourth-largest software services firm, jumped 9.6% to Rs 522.35 - its highest in more than a decade after posting a better-than-expected 33% rise in March quarter net profit.
The positive sentiment lifted bigger rivals. Tata Consultancy Services , Infosys Technologies and Wipro were up between 0.4% and 2.5%.
At 10:15am, the 30-share BSE index was up 0.85% at 19,284.70 points, with 29 components advancing, after rising as much as 1.1%. The 50-share NSE index or Nifty was up 0.9% at 5,791.20. Choksey expects the index to rise to around 5,900 this month.
“A combination of factors are helping today. Global cues and good monsoon are the main ones. Also, the recent correction has formed a good base,” said Deven Choksey, managing director and CEO of KR Choksey Shares.
The benchmark index had rallied 9.1% in March in its biggest monthly rally in six months, propelled by a revival in foreign buying after being net sellers in January and February.
Foreign funds have invested nearly $3 billion in equities since the start of March, betting on the country’s robust growth. The index has trimmed gains to 8.2% over the period on profit-taking.
For the year to date, the index is down 6%.
Leading lenders State Bank of India , ICICI Bank and HDFC Bank were up between 0.7% and 1.4%.
Metal producers such as Tata Steel , Sterlite Industries and Hindalco rose between 0.9% and 1.7% on firm international base metal prices.
London copper prices extended previous session’s gains, underpinned by hopes of a recovery in the moribund U.S. property market after positive permit and housing starts data on Tuesday and support from a weaker dollar.
The MSCI’s measure of Asian markets other than Japan was up 1.6, while Japan’s Nikkei rose 1.8%.
Suzlon Energy rose 1.8% to Rs 55.25 after the wind turbine maker received a 50.4 megawatt order from Gujarat State Fertilizers & Chemicals Ltd.
Pipavav Shipyard was up nearly 2% at Rs 90.70, extending Tuesday’s 9% jump after a source said the shipbuilder was in advanced talks to sell stake to an international shipyard and a deal was likely within the next two weeks.