Mumbai: Indian shares were on course to post their best weekly gain in 2010 on Friday, bolstered by surging foreign fund investment in the fast-expanding economy.
Reliance Industries led the gainers, rising as much as 1.3% after a source said the energy major was in talks with US-based Chesapeake Energy to buy a stake in Eagle Ford shale gas project.
At 11:03 a.m. (0533 GMT), the 30-share BSE index was up 0.87% at 19,586.86 points, with 27 of its components advancing.
The benchmark, which had snapped a seven-day rally on Thursday, hit 19,639.18 in early trade, its highest since January 2008. It has gained 4.2% so far this week, and is on track to stretch weekly rise to three in a row.
Neeraj Dewan, director of Quantum Securities, said investors were betting on India’s robust growth, seen at 8.5% in 2010-11 and lagging only China among major economies, to boost corporate earnings.
“Money is coming to the emerging markets where the growth lies,” he said. “We may see a pause, but a major correction is ruled out.”
Foreigners have bought shares worth $2.3 billion this month, taking the net inflow since the start of January to $15.2 billion.
Most emerging stock markets will finish 2010 with much stronger gains than their rich world counterparts, according to Reuters polls that showed only Japanese and Chinese bourses ending the year in double-digit slumps.
The BSE index, which has risen 12.2% in the year to date, could reach 20,080 by the end of 2010, then breach record high and hit 21,500 by the middle of 2011, according to median response of 21 market participants.
Reliance Industries was up 1.2% at Rs1,013.
Software majors recovered with the sector index rising 1.3% after shedding 2.3% on Thursday.
Leading outsourcers Tata Consultancy Services, Infosys Technologies and Wipro were up between 0.9-1.9%.
Financials were mixed after a Reuters poll showed on Thursday, India still has one or two interest rate increases in store for the rest of the fiscal year that ends in March.
The poll was conducted after the central bank had raised rates on Thursday for a fifth time this year to tame inflation.
ICICI Bank and HDFC Bank were up 1.3-0.2% respectively, while sector leader State Bank of India edged 0.2% lower.
In the broader market, gainers were nearly thrice the number of losers on volume of 143 million shares.
The 50-share NSE index was up 0.9% at 5,882.25 points.
Elsewhere, the MSCI’s measure of Asian markets other than Japan and Japan’s Nikkei were up 1.1% each.