Mumbai: Markets climbed 0.9% on Wednesday on course for a fifth session of gains, supported by global optimism about a Greek austerity plan. Financials led the rise.
Traders said a revival in foreign fund buying had helped sentiment, but domestic concerns of high inflation and slowing growth remained roadblocks.
Top lender State Bank of India gained 0.6%, while rivals ICICI Bank and HDFC Bank rose 0.5% and 1.1% respectively.
Mortgage lender Housing Development Finance Corp climbed 1.2%.
At 11:39am, the 30-share BSE index was up 0.86% at 18,651.09 points, with 26 components advancing. The 50-share NSE index was up 0.9% at 5,596 points.
The benchmark had gained more than 5% in the previous four sessions thanks to short-covering and buying to boost portfolio values before the quarter ends.
“It is a pullback. It is not a trend reversal. I don’t think we have reason enough to say that gains will continue,” said Sandeep Singal, co-head of institutional equities at Emkay Global Financial Services.
“There is no change in the domestic scenario. The inflation and interest rates concerns remain. High costs are pressuring margins,” he said.
The index is down more than 9% so far in 2011, making it one of the world’s worst performers.
Foreign funds bought around $732 million of shares in three sessions to Monday, latest data from the market regulator showed, after dumping $688 million over the previous nine days.
Singal said there was some respite in terms of crude prices coming off, a hike in local diesel prices and optimism over a solution for Greece’s woes.
Optimism an unpopular package of tax increases and spending cuts will be approved by Greek legislators have perked up global risk appetite.
Greece’s parliament holds a crucial vote on Wednesday on whether to submit the country to the austerity measures demanded as the price for funds to prevent the euro zone’s first sovereign default.
Export-driven software companies rose, lifting the sector index 0.9% and trimming the loss year-to-date to 12.2%.
Tata Consultancy Services , Infosys and Wipro firmed between 0.4% and 1.6%.
Around 249 million shares were dealt on the NSE, with a 2.9:1 advance-decline ratio.
The MSCI’s measure of Asian markets other than Japan was up 1.2%, while Japan’s Nikkei firmed 1.5%.
Sugar producers such as Shree Renuka Sugars , Dhampur Sugar Mills and Bajaj Hindusthan gained between 3.4 and 5.6%.
Indian sugar futures jumped 2% on Tuesday after the government gave a formal order to export additional 500,000 tonnes in the current season and set lower supply for domestic sales in July.