Mumbai: Indian shares rose more than 1% despite a choppy morning session on Friday, helped by gains made by infrastructure play Larsen & Toubro after the firm sold off a third of its stake in outsourcing firm Mahindra Satyam.
Analysts said the undertone of the market was cautious after concerns about consumer spending and strength of the recovery in the world’s largest economy hit Wall Street, snapping a six-day winning streak, and pulling down the Asian markets.
Shares in engineering and construction major Larsen & Toubro rose as much as 1.5% after it sold 27 million shares in a block deal in Mahindra Satyam at rS114.90 each.
The Larsen shares came off later to trade 1.1% higher at Rs1,658.10 Mahindra Satyam was down 4.5% at Rs112.20, topping the volume chart with 39 million shares changing hands.
At 12:53am, the 30-share benchmark index was up at 16796.42, with 27 components gaining. The index opened little changed, fell 0.2% and then rebounded to rise as much as 1.1%. The broader 50-share NSE index was up 1% at 4984.20.
“The market is being led higher by fresh liquidity infusion, but the action is limited to a few stocks and that raises doubts about its sustainability,” said Arun Kejriwal, director at KRIS. “Investors should be very careful at these levels.”
Foreign funds have moved more than $14.5 billion into Indian stocks so far this year, propelling the benchmark index up nearly three-quarters in the period, but some analysts have expressed concern about the rapid advance.
Shares in export-driven outsourcing companies such as Infosys Technologies rose 1.5% to Rs2,356.50, Tata Consultancy was up 2% at Rs667.30 and Wipro gained 1.3% to Rs633.50.
Information technology stocks have been in focus on hopes of a sharp revival in outsourcing services demand by overseas clients early next year. A fall in the Indian rupee to its lowest in a week also helped sentiment, traders said.
Ranbaxy Laboratories rose 0.8% to Rs415.40 after the country’s top drug maker by sales said it has received the World Health Organization pre-qualification for its Indinavir anti-retroviral AIDS drug.
In the broader market, 1,518 gainers outpaced 894 losers with 186 million shares changing hands on the Bombay Stock Exchange.