Mumbai: Indian shares closed up 0.68% on Friday, led by financials on hopes of a recovery in credit growth, with the earnings season, progress of monsoon rains and global events eyed for directional cues.
The market was largely rangebound ahead of an official annual monsoon rain forecast, which came in after market hours. India’s June-September monsoon is forecast to be normal this year with rainfall seen at 98% of long-term average.
Last year, the country grappled with the driest monsoon in 37 years, which hit farm output and sent food prices soaring.
Stocks got a boost in opening trades from India’s No. 3 outsourcer Wipro, which declared a 2-for-3 bonus and whose quarterly results met forecasts and pointed to accelerated growth in the sector.
Its shares ended down 1.42% at Rs692.95, after rising 3.6% to the day’s high of Rs728.
“Earnings are to a large extent factored into the market, though company-specific events and results might drive intra-day movements,” said Mahesh Patil, fund manager at Birla Sun Life Asset Management.
The BSE 30-share index Sensex gained 120.21 points to 17,694.20 points, with half of its components gaining. It has gained 0.6% on the week.
Bank stocks led the index gainers on hopes of a pick-up in loan demand on a rebounding economy and normal monsoon expectations.
Private lender ICICI Bank rose 3.37% to Rs975.75, while larger rival State Bank rose 1.48% to Rs2,255.60. HDFC Bank ended up 0.46% at Rs1,944.35.
Energy giant Reliance Industries, which has the heaviest weight in the main index, rose 1.1% to Rs1,087.35 ahead of its quarterly earnings. It is expected to report later on Friday a second straight rise in quarterly profit, with growth helped by higher gas output.
Shares of software outsourcing firm Tata Consultancy fell 0.7% to Rs779.80, after rising to the day’s high of Rs792, while rival Infosys rose 0.37% to Rs2,728.10.
In the broader market, gainers lagged losers 0.93:1 on volume of 400.9 million shares.
The NSE 50-share Index Nifty closed up 0.66% at 5,304.10 points.
“There are three main factors which will drive the markets in the next few weeks - the long earnings season as individual results of large companies will have an intra-day effect, regular updates on the monsoons and global events,” said Tejas Doshi, head of research at brokerage Sushi Finance.
He said the elections next month in the United Kingdom was one of the global events to watch out for, as that may have an impact on its sovereign ratings.
Such global events could determine fund flows from overseas investors. “If the risk appetite changes, that will obviously have an impact on our markets as our market is driven by foreign fund flows,” Patil said.
Foreign funds have invested a net $1.57 billion in Indian equities this month and $6.1 billion so far in 2010, data from the market regulator’s website showed.