Markets rise 1%; banks, techs lead

Mumbai: Shares rose more than 1% on Thursday after strong domestic manufacturing data as well as from China to Germany eased concerns about the euro zone debt crisis and bolstered risk appetite among investors.

Automakers rallied after better-than-expected sales in January, while encouraging growth outlook helped boost banking and software stocks.

Shares in telecom operators Bharti Airtel and Idea Cellular rose by 7% and 4% respectively after Supreme Court on Thursday quashed 122 telecom licences issued in 2008 in a judgement that is expected to impact their major rivals.

Reliance Communications and Telenor’s India partner Unitech fell 5% and 7% respectively.

By 10:18 am, the 30-share BSE share index rose 1.1% to 17,495.36 points, with 24 of its components higher.

“The manufacturing data has certainly had a positive impact, but strong liquidity is also a factor, and that is reflected in the FII inflows,” said Neeraj Dewan, director at Quantum Securities.

Foreign institutional investors (FIIs) bought shares worth about $2 billion last month, propelling the benchmark index up 11.3% -- its best January rise in 18 years.

India’s manufacturing sector grew at its fastest pace in eight months in January as factory output surged the most on record on increased domestic and foreign demand, a business survey showed on Wednesday.

Factory activity also rose in China, the United States and Germany in January, data showed on Wednesday, smoothing worries over the fallout from Europe’s festering debt crisis.

“We are not out of the woods yet, but sentiment has definitely changed,” Dewan said.

Banking stocks rose on hopes renewed economic growth would boost credit demand while interest rates are widely expected to have peaked are likely to ease soon.

Largest lender State Bank of India rose 1.3% and rival ICICI Bank, which on Tuesday posted better-than-expected profits, was up 1.8%. HDFC Bank gained 0.2%.

Export-driven software companies also rose on hopes that strong manufacturing growth in their US market will encourage higher technology spending. Tata Consultancy Services rose 1 percent, while Infosys was up 0.8%.

Mahindra Satyam was up nearly 3% after it reported a stronger-than-expected five-fold jump in quarterly net profit, helped by a fall in the value of the rupee.

Automakers Maruti Suzuki and Mahindra & Mahindra gained 1 percent and 2.3% respectively after the two companies posted robust sales growth in January.

Energy explorer Cairn India fell 2% after the company said its chief executive officer has sold more than half his shareholding.

The 50-share NSE index gained 0.9% to 5,280.30.

In the broader market, there were more than three gainers for every decline on a strong volume of about 263 million shares.

Stocks on the move

• Hexaware Technologies jumped 8.75 to Rs95.70 after the software services company posted a 123% jump in third-quarter net profit, and said it expects 2012 revenue to be at least $370 million.

• Hero MotoCorp was up 1.6% at Rs1,964 after the company said sales volume rose 11.5% to 520,272 two-wheelers in January, topping analyst estimates.

• Astec Lifesciences Ltd rose nearly 5% to Rs33.10, its maximum daily limit, after it entered into exclusive long-term contract with a multinational company to manufacture and supply a fungicide.