Mumbai: Indian shares rose 0.4% on Thursday as strong European peers and expectations for robust industry output data on Friday lifted investor appetite for risk and helped the market recoup early losses.
Leading telecoms Bharti Airtel and Reliance Communications were among the top gainers, after the central bank on Wednesday allowed telecom firms to access oversees markets to fund their bids for 3G spectrum, which India plans to auction in January.
Private-sector lender ICICI Bank, and engineering and construction firm Larsen & Toubro also led the main index higher.
Mahindra Satyam jumped as much as 9.1% after it said on Wednesday it would pay $70 million to Britain-based Upaid Systems Ltd in a patent suit settlement which analysts say lifts uncertainty from the Indian technology outsourcer.
Parent Tech Mahindra rose 2.2% to Rs1,017.
“Recently, GDP data came in much better than expected. The view in the market is that industrial data tomorrow could show very strong growth,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services.
“We have a strong correlation to overseas markets, and Europe is doing well.”
India’s annual industrial output growth probably surged in October on robust consumer demand and government spending. The median forecast in a Reuters poll of 21 analysts is for an annual rise of 10.3%, accelerating from a provisional 9.1% growth in September.
The economy grew 7.9% in the quarter through September, the fastest rate in 18 months and smashing expectations for 6.3% expansion.
The 30-share BSE index ended up 0.37%, or 64.09 points, at 17,189.31, with gainers and losers evenly matched. It had fallen as much as 0.5% earlier as investor confidence across Asia was dented by credit worries in Europe and the Middle East.
The 50-share NSE index rose 0.4% to 5,134.65.
Fitch Ratings has downgraded Greece, while Moody’s cut the ratings of six Dubai-linked issuers after concluding that no “meaningful” government support would be provided to top firms like DP World.
Investors had looked to cash in profits from a 3% rally over the past two weeks on the concerns, but dealers said long-term investors such as institutions were looking to buy into dips in the market.
India’s benchmark BSE index is up more than 78% this year on hopes India will be one of the leaders in helping the global economy turn around.
The jump has outstripped the benchmark MSCI Emerging Markets Index that gained nearly 70% and a 29% rise in the MSCI all-country world stock index.
Overseas funds, which have pumped almost $16 billion into Indian stocks this year, are expected to sustain the market in the long term even though there may be a dip in the short term.
No. 1 telecoms firm Bharti climbed 3.4% to Rs342.35, while rival Reliance Communications ended up 2.2% at Rs185.70.
ICICI Bank rose 2.5% to Rs876.25, while Larsen rode up 2% to Rs1,686.55.
Mahindra Satyam ended up 5.3% at Rs108.05, after rising to Rs112.
In the broader market, gainers led losers 1,682 to 1,169 on relatively moderate volume of 472.1 million shares.
Asian shares were lower on Thursday, with Japan’s Nikkei down 1.4%, while MSCI’s measure of other Asian markets fell 0.1%.
At 4:13pm, the FTSEurofirst 300 index of top European shares was up 0.8%.