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Tech firms drive Sensex to 32-month high

Tech firms drive Sensex to 32-month high
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First Published: Wed, Sep 15 2010. 01 29 PM IST
Updated: Wed, Sep 15 2010. 01 29 PM IST
Mumbai: Indian shares rose to 32-month highs for a fourth session on Wednesday, with outsourcers leading the way as promising US retail sales data boosted optimism over economic recovery in the world’s largest economy.
Tata Consultancy Services and Infosys Technologies, the country’s two leading software services firms that get most of their revenue from the United States, cruised to record highs.
At 11:13 a.m. (0543 GMT), the 30-share BSE index was up 0.98% at 19,536.87 points, with 27 of its components advancing. It had hit 19,554.36 -- its highest since January 2008.
Traders said surging foreign portfolio investments on the back of robust economic growth and earnings expectations were driving the market.
The benchmark index has risen more than 1,300 points over seven sessions, taking gains since the start of January to 11.9%. The index has outperformed its emerging BRIC peers.
Foreigners have poured $14.3 billion into Indian stocks so far this year, adding to record inflow of $17.6 billion in 2009.
Higher-than-expected 13.8% jump in factory output in July has boosted hopes the economy will beat government estimates of 8.5% expansion in 2010-11.
“The sentiment is bullish, but profit booking is not ruled out,” said said Kunal Sukhani, manager of institutional equities at Asian Markets Securities.
Tata Consultancy rallied as much as 1.6% to an all-time high of Rs908.10, while Infosys gained 2.1% to a record Rs3,039. Wipro gained 1.9%.
“Given the robust pick-up in demand for discretionary services, we see leading IT vendors’ business mix shifting towards higher-priced offerings and realisations improving towards 2HFY11,” IIFL said in a note this week.
Energy major Reliance Industries, which is down 7% this year on concerns over diversification into non-core businesses and delay in ramp-up of gas production, recovered some of the losses.
The stock, which has the heaviest weight on the main index, was up 2.6 %.
Financials were mixed ahead of the central bank’s mid-quarter policy review on Thursday, when it is seen lifting interest rates by 25 basis points.
State Bank of India and ICICI Bank shed 0.5% and 0.1% respectively, while HDFC Bank gained 0.2%.
In the broader market, gainers led losers in a ratio of 1.6:1 on volume of 154 million shares.
The 50-share NSE index was up 1.2% at 5,862.90.
Elsewhere, the MSCI’s measure of Asian markets other than Japan was up 0.3%, while Japan’s Nikkei rose 2.5%.
STOCKS ON THE MOVE
* Non-ferrous metals producer Sterlite Industries was down 0.5% at 169.90 rupees, as copper traded lower in London and Shanghai.
* Pioneer Distilleries hit the 5-percent upper limit for the second session at Rs 76.10, after United Spirits said on Tuesday it had agreed to buy a 54.7%stake in the company at Rs101 a share.
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First Published: Wed, Sep 15 2010. 01 29 PM IST