Bangalore: Shares climbed more than 1% on Wednesday as stronger Asian markets spurred investors to grab bargains, a day after the main index had slid to its lowest close in five months.
Bharti Airtel Ltd rallied as much as 3.5% on optimism over the top mobile phone carrier’s operational outlook, after initially sliding more than 3% on a worse-than-expected 41% drop in quarterly profit.
Leading outsourcers were among the top gainers after being battered in the past few sessions. Tata Consultancy Services rose 3.2% and Infosys Technologies climbed 2%.
By 11:57am, the BSE index was trading up 1% at 18,193.37, with 17 of its components gaining.
“Some worries seem to be receding on the Egypt issue,” said Neeraj Dewan, director of Quantum Securities. “Valuation-wise some stocks have become very attractive after the fall. We could see buying from long-term investors.”
Global markets considered the crisis in Egypt contained, with little risk of it spreading through the region for now, after Egyptian President Hosni Mubarak said he would surrender power in September -- although this was seen as too slow by many.
However, worries remained that rising domestic inflation could force more monetary tightening.
“The sentiment is still not good. Concerns remain about inflation, interest rates. We need to watch foreign fund flows,” Dewan said.
Reserve Bank of India last week raised interest rates for the seventh time since March to curb stubbornly high inflation.
The BSE index is down more than 11% this year, after having risen 17% in 2010, as worries about surging inflation in Asia’s third-largest economy led to withdrawals by overseas portfolio investors.
Foreign funds pulled out $1.4 billion from equities in January, after ploughing in a record $29.3 billion last year.
Shares in Bharti were trading up 2.2% at Rs 321.40 and rival Reliance Communications rose 0.6% to 119.10 rupees.
The outlook for India’s mobile market -- the world’s second biggest and the fastest growing by wireless customers -- has improved after prices steadied last year following cut rate competition which sent call pricing tumbling in late 2009.
Energy major and index heavyweight Reliance Industries Ltd rose 3%, driven in part by value buying and hopes rising crude prices would improve refining margins. The stock is still down nearly 13% this year on concerns about its gas output.
In the broader market, gainers outnumbered losers in the ratio of 1.6 to 1 on volume of 126 million shares.
The Nifty or NSE-50 index was up 0.7% at 5,457.35 points.
The MSCI’s measure of Asian markets other than Japan was up 1% by 12:05pm, while Japan’s Nikkei had gained 1.8%.
NMDC rose 3% after the company posted a better-than-expected net profit of 15.18 billion rupees for the third quarter.
Opto Circuits (India) rose more than 4% after the medical device maker said its US unit got a contract from a unit of Tyco International for cardiac devices. Financial details were not disclosed.