Mumbai: Indian shares closed up 0.6% on Thursday, supported by a rise in European equities and as Asian markets recovered from early lows.
European shares rose to their highest in more than 17 months, with banks gaining ahead of a European Union meeting to aid Greece, while plans by Dubai to support its debt-laden firms provided relief.
The 30-share BSE index closed 0.62% or 107.83 points, higher to finish at 17,558.85 points, with 18 of its components closing in the green. The 50-share NSE index closed 0.7% higher at 5,260.40 points.
Outsourcers led the gains, with Infosys Technologies scaling record highs.
However, trade was choppy due to the expiry of monthly derivative contracts on the National Stock Exchange.
“Market should stay rangebound until (Jan-March) corporate earnings start coming in next month,” said Arun Kejriwal, director of research firm KRIS.
“Valuations are neither cheap nor are they very expensive as yet. Earnings should give us a better picture,” he added.
Foreigners have pumped around $3.5 billion in Indian equities so far in 2010, a portion of which was diverted to primary market issuance.
A major chunk of this inflow came in March, propelling the index by nearly 7% in the month.
The benchmark was expected to rise to 18,000 points by end of June and hit 19,250 by December, a Reuters poll showed earlier this month.
IT bellwether Infosys Technologies touched a record high of 2,821.Rs40, before erasing some early gains to close 1.1% higher at Rs2,805.60.
“There are expectations of good March quarter results. Also, their business inflow looks promising, due to improving scenario in the US,” said Sandip Sabharwal, CEO of portfolio management services at Prabhudas Lilladher.
However, there are concerns that the rupee may appreciate from here and Infosys’ valuations look expensive at current levels, he added.
Rivals Tata Consultancy Services rose 0.1%, while Wipro dropped 0.1%.
Bharti Airtel rose as much as 3.2% as it looked set to wrap up its $9 billion deal to buy most of Kuwaiti telecom group Zain’s African assets, giving India’s top mobile operator a foothold in the frontier market in its third attempt.
“It is a very good acquisition from a long-term perspective. Africa is the next geography which is poised for growth after Asia,” said Sabharwal.
But the domestic issues of a crowded market and pricing war would dominate in the near term, he added.
Bharti pared some gains and closed 2.3% higher at Rs313.75.
Banks mostly rose in late trade, pulled up by broader market rally, shrugging off hawkish comments from the central bank governor.
Reserve Bank of India governor said on Wednesday that demand-side pressure on the economy can build up further and it was better to take some action now and continue with the exit strategy.
The central bank had hiked key rates by 25 basis points last Friday, a month earlier than expected, and another increase is seen at its policy review on 20 April.
Leading lenders State Bank of India and ICICI Bank rose 0.2% and 0.5% respectively, while private sector lender HDFC Bank climbed 2.2%.
In the broader market, declining shares outnumbered advancing ones in a ratio of 1.1:1 on a volume of 411 million shares, higher than Tuesday’s volume.
Indian markets were closed on Wednesday for a public holiday.
By 3:59pn, the FTSEurofirst 300 index of top European shares was up 0.8%, while MSCI’s measure of Asian markets other than Japan rose 0.1%.