Mumbai: Export-driven outsourcers propelled Indian shares higher on Thursday, with bellwether Infosys Technologies racing to an all-time high on the back of a recovery in global spending on technology.
Investors were also upbeat after the Indian economy was seen growing at a faster pace in 2010/11 than earlier expected, helped by double-digit expansion in factory output, robust domestic demand and improving exports.
Asia’s third-biggest economy will grow at annual rates above 8 percent in coming quarters and is seen expanding 8.4 percent for the 2010/11 fiscal year, a Reuters poll 20 analysts released on Wednesday showed.
A similar quarterly poll in January had forecast growth of 8%.The poll showed that growth would accelerate in the fiscal year 2011/12 to 8.6%.
Shares in Infosys, which gets more than half of its revenue from the United States, rose as much as 1.5 percent to an all-time high of Rs2,823.80.
The No.2 outsourcer had forecast stronger-than-expected annual sales forecast on Tuesday, suggesting a gradual recovery for India’s $60 billion information technology services sector, though a stronger rupee and higher pay could check profit growth.
Bigger rival Tata Consultancy Services and and No. 3 Wipro rose 1.3% each, lifting the sector index to its highest in three years.
By 11:02am, the benchmark 30-share BSE index was up 0.33% at 17,880.90, with 23 of its components gaining. The 50-share NSE index was up 0.4% at 5,343.25.
Sanjeev Patkar, director of research at Almondz Global, said strong foreign fund inflows should underpin the market in the near term. “We do not see downside risk to the market, unless global cues turn very negative,” he said.
Foreign funds have poured nearly $5.3 billion into equities so far this year, including in primary market offerings.
Financials were mixed ahead of wholesale price inflation data for March that is forecast to top 10% and reinforce expectations for another rate rise next week, the second in as many months. The data is due by noon/
State Bank of India and ICICI Bank were down 0.7% each, while HDFC Bank gained 0.8%.
Energy giant Reliance Industries, which has the highest weight on the Sensex, slipped 0.2% to Rs1,118.85.
Non-ferrous metals producer Sterlite Industries rose 1.2% as Shanghai copper edged up supported by Chinese economic data that met expectations.
Aluminium maker Hindaclo rose 1.4% while Tata Steel, the world’s eighth-largest steel maker by output, climbed 1.1%. In the broader market, gainers outpaced losers in a ratio of 2.1:1 on volume of 178 million shares.