Mumbai: Indian shares notched their best single-day percentage-point gain in 6 weeks to close 1.2% higher on Monday, boosted by in-line corporate earnings, strong July auto sales and a pick up in manufacturing expansion, with firm world equities also supporting sentiment.
Financials led the gains with top private lender ICICI Bank rising as much as 4.2% with an in-line 17-percent rise in quarterly net profit, and a 15-percent credit growth forecast in the year to March 2011 as loan demand from corporate and mortgage borrowers remain strong.
Credit Suisse raised ICICI Bank to “outperform” from “neutral” and raised the 12-month target price to Rs1,079 from Rs826. ICICI Bank closed 3.9% higher at Rs939.75.
The 30-share BSE index rose 1.19% or 212.92 points higher to 18,081.21, with 25 of its components closing in the green. The 50-share NSE index or Nifty rose 1.19% to 5,431.65 points.
India’s HSBC Markit Purchasing Managers’ Index bounced back in July, driven by new orders and stronger factory output, rising to 57.6 in July from 57.3 in June when it slipped from a multi-year high.
Foreign funds pumped in $10.3 billion into Indian equities so far this year, with the main index rising 3.5%. Primary market offerings attracted a part of this inflow.
In 2009, foreign funds had invested a record $17.5 billion, which had led to a rally of 81%. “All cues are looking positive for today. But, the question is...can this rise sustain?,” said Ambareesh Baliga, vice-president of Karvy Stock Broking.
“Investors are overlooking the uncertainty in the overseas markets,” he said, adding that Nifty could face resistance at 5,450 level.
Other financials cheered good results from peer ICICI Bank. Top lender State Bank of India rose 3.1% while rival HDFC Bank firmed 0.4%.
Mortgage lender Housing Development Finance Corp climbed 1.4%.
Top mobile operator Bharti Airtel rose 3.6%, as the stock looked attractive at the current price from a long-term perspective, dealers said.
The stock is still down 3.3% in 2010, after declining 8% in 2009, weighed down by declining tariffs and rising competition.
Reliance Infrastructure rose 0.8% after the Anil Dhirubhai Ambani Group company said late Friday its June quarter net profit rose 5.3%.
Top engineering and construction firm Larsen & Toubro gained 0.8% as it said it received an order worth $1.4 billion from Jaiprakash Group to help set up a power plant in northern India.
Robust July sales numbers drove auto stocks higher with the sector index scaling a record high in the day.
Vehicles maker Tata Motors rose 0.2% after it said its India July unit sales rose 41%, while leading car maker Maruti Suzuki <raced 0.9% on a 29-percent jump in July sales.
Bajaj Auto gained 1.5% after the no. 2 motorcycle maker said on Sunday its July vehicle sales jumped 65%.
SKS Microfinance, which is raising as much as $353 million in an initial public offering, was subscribed 11.5 times by 2:30pm, on its last day of subscription.
Advancing shares outnumbered declining shares in the ratio of 1.5:1 in the broader market, while the BSE clocked a moderate volume of 397 million shares.
World stocks were firm as results from BNP Paribas and HSBC boosted optimism for corporate earnings and the economic outlook for the rest of the year.
MSCI world equity index was up 0.9% at 1026 GMT while the more volatile emerging markets index rose 1.5%.
Adani Enterprises rose 4.7% to Rs609.70 as Australia’s Linc Energy confirmed it was in talks with the Indian firm to sell a key coal asset for a reported A$1 billion in what could be the largest single purchase by an Indian firm in Australia’s mining sector.
BGR Energy climbed 5.8% to Rs772.15 rupees, after the energy equipment supplier said late Friday its June quarter net profit trebled.
State-run Gail India firmed 2.1% to 447.20 rupees, as its quarterly net profit rose 35%.
Tata Chemicals rose 4.7% to Rs352.60, after the chemicals maker late Friday posted a sharp surge in consolidated quarterly net profit to Rs216 crore, well above street estimates.
Oil explorer Cairn India rose 1.6% to Rs340.20, as oil prices climbed near 12-week highs.