Mumbai: Indian shares climbed 0.6% on Wednesday led by financials, but there was little conviction of sustaining the rise in the absence of fresh news and a feeling the market has become pricey.
With the benchmark index outperforming its peers in Asia and elsewhere, investors have become choosy with some foreign fund managers saying Chinese stocks that have been laggards were a relatively better bet.
“There are only stock-specific stories going on,” said Anish Marfatia, head of sales trading at Avendus Securities. “The market is lacking a direction. There are no immediate domestic triggers in sight.”
Banks nudged higher on expectations loan demand will pick up in an expanding economy despite rising interest rates.
Private-sector ICICI Bank and HDFC Bank rose 0.5%and 1.1%respectively, while sector leader State Bank of India and mortgage lender Housing Development Finance Corp were each up 0.2%.
A senior policy adviser told Reuters on Tuesday headline inflation had peaked, and would ease faster from September as the base effect kicked in.
By 11:08am, the 30-share BSE index was trading up 0.56%at 18,149.17, with 21 of its components gaining. It is up 3.9%in the year to date, largely driven by foreign fund inflows of $11.7 billion. The 50-share NSE index was up 0.6%at 5,444.45.
Traders said any slow down in the inflows could potentially halt the stocks rise.
Bharti Airtel climbed 0.3%as the top mobile operator signed up 2.6 million mobile subscribers in July, taking its total to 139.2 million subscribers.
Export-led outsourcers edged higher as robust profits from US retailing giants boosted confidence in the corporate outlook in world’s largest economy.
Top software firm Tata Consultancy Services was up 0.7%, while rivals Infosys Technologies and Wipro gained 0.9%and 1%respectively.
In the broader market, gainers were more than double the number losers on volume of 167 million shares.
Hair oil producer Bajaj Corp listed at Rs780, 18.2%higher from its issue price of 660 rupees. It was later trading at 765.55 rupees.
Indiabulls Financial Services was up 2.1%at Rs156.50 after the Business Standard reported that Anil Dhirubhai Ambani Group was in talks to acquire a 26%stake in Indian Commodity Exchange from the firm.
Suzlon Energy dropped 1.7%to Rs50.35 as JP Morgan downgraded the wind turbine maker to underweight from neutral.