Mumbai: Indian shares were up 0.6% on Thursday, helped by a surprise bonus issue plan by Reliance Industries but telecoms and outsourcers fell on profitability concerns.
Reliance rallied as much as 5.2% after the energy giant late on Wednesday announced a one-for-one bonus share issue, a move seen to pacify investors after the stock’s underperformance after a $660 million share sale last month.
But concerns about falling refining margins and a pending legal dispute trimmed the rise.
Top mobile operator Bharti Airtel and rival Reliance Communications fell around 2% on worries falling tariffs and increased competition will squeeze profit margins for the sector.
Export-driven outsourcers Tata Consultancy Services and Infosys Technologies that get bulk of the revenue in dollars fell for the second day in a row as the rupee climbed to fresh one-year highs.
By 12:06pm, the 30-share BSE index was up 0.61% at 16,909.55, after rising as much as 1.1% and then falling 0.2%. Twenty-two of its components advanced. The 50-share NSE index was up 0.81% at 5,025.90.
“Big gains are unlikely as traders look for profit sales at small spikes,” said K.K. Mital, head of portfolio management services at Globe Capital. “The earnings and the outlook will provide further irection to the market,” he said, referring to the quarterly results parade that will be kicked off by software services bellwether Infosys Technologies on Friday.
The main index has risen about three-quarters so far this year on the back of foreign portfolio inflows of $12.7 billion.
Reliance, which the market values at more than $70 billion, was trading 2.3% higher at Rs2,146.90. Goldman Sachs said it maintained a ’buy’ on the stock with a 12-month target price of Rs2,620.
Bharti was down 2.3% at Rs350.20 after hitting 341, its lowest since 21 April. Reliance Communications shed 2.1% at Rs256.50.
Tata Consultancy dropped 2.7% to Rs576.80 and Infosys fell 1.4% to Rs2,219.80.
Larsen & Toubro fell 2.2% to Rs1,640.95, after the engineering and construction firm said it raised $600 million through a sale of shares and convertible debentures.
In the broader market, gainers outnumbered losers in the ratio of 1.1:1 on relatively lower volume of 217 million shares.