Mumbai: Indian shares climbed more than 1% to their highest in 33 months on Friday, putting them on track to post gains for the fifth consecutive week on the back of surging foreign fund investments.
Leading car maker Maruti Suzuki rallied 2.9% as its September sales rose 29.6% to a record.
Mahindra & Mahindra, the top utility vehicle maker, and truck leader Tata Motors rose 2.1 and 2% respectively in anticipation of robust sales figures.
India’s manufacturing sector continued to expand in September although at a considerably slower pace than in preceding months, predominantly weighed down by a fall in new orders and output, a survey showed.
At 11:42am, the 30-share BSE index was up 1.18% at 20,306.22 points, with 28 of its components advancing. It had hit 20,349.74, its highest since January 2008.
The benchmark, which is up 1.3% so far this week, has gained 16.3% in the year to date, boosted by foreign fund inflows of $18.2 billion.
R.K. Gupta, managing director of Taurus Mutual Fund, said there was a sense of relief after a court ruling on a potentially troublesome dispute passed without any incident.
“People are drawing comfort after the Ayodhya verdict, as it did not create any panic and peace has prevailed,” he said.
An Indian court ruled on Thursday that the site of a demolished mosque would be split between Hindus and Muslims, dousing immediate fears of a violent backlash in one of the country’s most religiously divisive cases.
Reliance Industries, which has been a laggard due to lack of any near-term positives, climbed 1.2% in an attempt to catch up with the broader market rally. The stock, which has the highest weight on the Sensex, is down more than 8% this year.
Financials continued to gain on hopes for better loan demand on the back of robust economic growth. State Bank of India and ICICI Bank firmed 0.4% and 1.4% respectively.
In the broader market, gainers were nearly thrice the number of losers on volume of 209 million shares.
The 50-share NSE index was up 1.2% at 6,099.60.
Elsewhere, the MSCI’s measure of Asian markets other than Japan was up 0.2%, while Japan’s Nikkei rose 0.6%.
Rural Electrification Corp rose 6.8% to Rs365.80, after the Reserve Bank of India approved increase in foreign institutional investors limit in the company to 35% from the current 24%.
IL&FS Transportation Networks firmed 1.2% to Rs322.10, after it said it was the lowest bidder for a Rs1,094 crore road project, to be developed with Spanco in consortium.