Mumbai: Indian shares climbed for a third day in a row on Tuesday, taking gains in the main index to double the 2009 low in March, as investors joined a rally across Asia but there were concern about resistance.
Expectations for strong quarterly earnings and signs of a revival in industry underpinned the market, after the benchmark index surged past 16,000 to its highest close in 15 months on Monday.
At 12:20pm, the 30-share BSE index .BSESN was up 1% at 16,175.87 points - its highest level in 15 months and more than double its 2009 low of 8,047.17 in early March. Twenty stocks gained. The 50-share NSE index was up 0.9% at 4,826.60.
State Bank of India chairman said he expected earnings at the country’s largest lender would rise 30-35% in the current quarter, with retail loans growing at about twice the pace from the year earlier. Its shares were trading up 1.3% at Rs1,838.50, after rising as much as 1.5%.
The domestic industry is showing signs of revival and foreign investors are also returning, a junior finance minister said on Tuesday.
However, the market’s strong rally since hitting the 2009 low despite worries an erratic monsoon will slow down economic growth are causing unease.
“The concern is we are just rising too soon, too fast,” said Nilesh Doshi, president of equity research at Techno Shares and Stocks. ”Fundamentally, we are overstretched at current levels.”
He said the rise was largely propelled by firmer global markets. Shares in Asia, excluding Japan, climbed to a year high on Tuesday.
The BSE index has risen nearly 68 percent so far in 2009, after sliding 52% last year.
Engineering and construction firm Larsen & Toubro firmed 1.6% to Rs1,623. Its financial services unit is in talks to buy Cholamandalam DBS Finance’s domestic mutual fund operation, sources told Reuters late on Monday.
Cholamandalam DBS was up 9.9 pecent at Rs69.65. Energy giant Reliance Industries, which has the most weight in the main index, rose 3% to Rs2,060.
Tata Consultancy Services was up 2.3% at Rs563, extending gains from the previous day after the top software services firm’s CEO said on Monday its demand was good.
In the broader market, gainers led losers 1,668 to 972 on heavy volume of 290 million shares.
Asian shares rose with Japan’s Nikkei .N225 gaining 0.7%, while MSCI’s measure of other Asian markets was up 1.2%.