Mumbai: Shares rose more than 1% on Tuesday, led by gains in financials and software stocks after upbeat results from leading outsourcer Tata Consultancy Services (TCS) bolstered investor sentiment.
Analysts said several stocks offered bargain opportunities after the market had slid nearly 8% over the past two weeks, but gains may not be sustainable as macro-economic worries and an interest rate hike loom.
“A large segment of investors has been on the short side of the market. Frontline stocks would become attractive at some point, given this situation,” said Gajendra Nagpal, chief executive at Unicon Financial Intermediaries.
“I don’t think the rally has any substance unless it sustains for two-three days.”
By 10:24 am, the 30-share BSE index was trading 0.92% higher at 19,054.94 points, with 24 of its components advancing. It had risen more than 1% earlier.
Tata Consultancy led the gains after it beat market expectations with a 30% jump in quarterly profit late on Monday and said it expected strong demand for outsourcing services.
The stock was up 3.1% at Rs1,173. Rivals Infosys rose 1% and Wipro, which reports earnings on Friday, gained 2.7%.
Financial stocks, which have been hammered since the beginning of the month on fears a likely interest rate increase will hurt loan growth, reversed the trend.
Top lender State Bank of India was up 1.3%, while ICICI Bank rose 1.9% and HDFC Bank gained 0.7%.
Engineering conglomerate Larsen & Toubro was up 0.4%. It had fallen nearly 1.7% on Monday after the company warned it might not meet its full year order book growth target. The firm had reported a forecast-beating 10.5% rise in quarterly earnings.
Reliance Infrastructure and motorcycle maker Hero Honda were among the main losers, down 1.9% and 1.1% respectively.
Stocks on the move
Tata Steel, the world’s seventh largest steelmaker, rose 2.1% to Rs635.60 as its $770 million follow-on share sale opened for anchor investors. The public offer, priced at a discount to the market price, opens on Wednesday.
Hindustan Construction Co fell 4% to Rs39.75 after the Economic Times newspaper reported that a committee set up by the federal environment ministry has confirmed ‘environmental violations´ by unit Lavasa Corp, which is developing a hill station in western India.
Private sector lender Axis Bank rose 3% to Rs1,265 after it reported a 36% jump in December quarter profit.