Mumbai: Indian shares rose 0.5% on Monday, led by gains in financials stocks such as HDFC Bank, as brokerages and investors gave a thumbs up to the December quarter earnings announced so far.
Financials topped the gainers, after private sector HDFC Bank and Axis Bank reported a more than 30% rise in their third-quarter net profit last Friday.
Morgan Stanley upgraded the bank to “overweight” from “equal”, citing the pace of decline in credit costs and the improvement in its earnings quality.
“We maintain our view that Indian banks are in the sweetest spot on a regional basis, hence, our positive view on the industry,” Morgan Stanley said in a note.
HDFC Bank, which rose as much as 5.1% intra-day, closed 4.5% higher at Rs1,767.55.
Top private lender ICICI Bank climbed 2.6% to Rs863.35.
The 30-share BSE Index closed up 0.49% or 86.78 points at 17,641.08, as most companies announced robust December quarter earnings, but some analysts think it is attributed to a low base effect. Nineteen of its components gained.
“We are going through a thick season of earnings,” said Ajay Parmar, head of institutional equities at Emkay Global.
“We are comparing the best quarter of the current year with the worst quarter of the last year. It could be an optical illusion,” he added.
Tata Consultancy Services rose as much as 3.1% to a record high of Rs816.40 in early deals, as brokerages upgraded the stock after the top software services exporter posted forecast-beating quarterly results.
It closed 1% higher at Rs799.60.
Bank of America-Merrill Lynch upgraded TCS to “buy” from “underperform”, saying it should benefit from stabilisation in IT budgets and a pick up in demand particularly from the banking, financial services and insurance sectors.
Auto stocks raced on expectations of spectacular December quarter results.
Hero Honda gained 4.4%, while Tata Motors climbed 1.5%.
In the broader market, gainers led losers in a ratio of 1.2:1 in a volume of 512 million shares, lower than last week’s average of 651 million shares.
The 50-share NSE index closed 0.4% higher at 5,274.85.