Mumbai: Automakers drove shares more than 1% to their highest in 33 months on Monday, powered by robust sales growth and surging foreign portfolio investments in the rapidly expanding economy.
Bajaj Auto rallied nearly 3% to an all-time high after the No. 2 motorcycle maker said September sales rose 26%.
Car sales in India raced ahead in September helped by strong economic growth, while demand in the United States, Europe and Japan stayed stuck in low gear.
Maruti Suzuki, Tata Motors and Mahindra & Mahindra were up between 0.8% and 3.2%.
Mahindra Satyam, earlier known as Satyam Computer Services, was down 0.7% in choppy trade after the outsourcer said on Friday it had received a notice from the US Securities and Exchange Commission saying the market regulator may file a civil suit alleging fraud.
By 10:53am, the 30-share BSE index was up 0.79% at 20,606.94 points, with 21 of its components advancing. The 50-share NSE index was up 0.8% at 6,190.60 points.
In early trade, the benchmark rose as much as 1.3% and hit 20,706.74, its highest since January 2008, and is about 600 points away from a record high. The index is up nearly 18% in the year to date.
“No one wants to read into any caution right now. People are ignoring all likely negatives and are focused on optimism,” said Arun Kejriwal, director of research firm KRIS.
Foreign funds have pumped $19.2 billion into Indian equities so far in 2010, compared with $17.5 billion in 2009.
Bajaj Auto was up 2.1% at Rs1,575.45 after hitting a record 1,589.90.
Financials firmed as investors expected loan demand to catch up in the world’s second-fastest growing major economy after China.
Top lender State Bank of India was up 0.7% while rivals ICICI Bank and HDFC Bank rose 2% and 0.3% respectively.
IT firms rose after Accenture raised its earnings outlook for the new fiscal year on Friday and boosted its dividend, defying concerns that a sluggish global economy could hurt sales.
Leading outsourcers Tata Consultancy Services, Infosys Technologies, and Wipro were up between 1.3% and 2.1%.
In the broader market, gainers led losers in a ratio of 1.7:1 on volume of 183 million shares.
Elsewhere, the MSCI’s measure of Asian markets other than Japan was up 1%, while Japan’s Nikkei traded flat.
Sun Pharmaceutical Industries rose 1.7% to Rs2,064 after the drugmaker said late on Friday it got tentative US FDA approval for generic Stalevo tablets.
Jaiprakash Associates was up 2.9% at Rs127.60 as the engineering and construction firm said after market hours on Friday its cement shipments in September jumped 61% from a year ago.