Mumbai: Indian shares rose for the third-straight session on Thursday, gaining 0.2% to touch their highest close in two months, after rating agency Standard and Poor’s upgraded the country’s outlook.
Standard & Poor’s affirmed its ratings on India and revised its outlook to stable from negative, saying the country’s fiscal position could begin to recover and the economy would remain on a strong growth path.
IT bellwether Infosys Technologies led the gains and touched a record high of Rs2,792.15 in the day.
“In our view, strong revenue outlook from existing top clients and new marquee wins can result in Infosys significantly outperforming peers,” JM Financial analyst Govind Agarwal said in a note on Wednesday.
The stock closed 1.7% higher at Rs2,784.75. The 30-share BSE Index closed 0.17% or 29.18 points higher to finish at 17,519.26. Seventeen of its components closed in the green. The 50-share NSE index rose 0.3% at 5,245.90.
“It (S&P action) is a positive and stocks rose in a knee-jerk reaction. But, it does not help stock markets beyond a point,” said Tarun Sisodia, head of research at brokerage Anand Rathi.
“Of course, the companies willing to borrow overseas, will now get funds at lower cost,” he added.
Sisodia expects the stocks to be volatile in the near term on issues in the global markets.
A Reuters poll expects Sensex to rise to 18,000 points by end-June and end 2010 at 19,250, driven by earnings optimism and supported by robust economic growth.
Data from markets regulator showed foreign funds have pumped in around $2.8 billion in Indian equities since the start of this month to 16 March, with some of the flow diverted to primary market offerings.
Financials closed mostly higher on expectations of strong economic growth.
Leading lenders State Bank of India and ICICI Bank rose 0.2% and 1.2%, respectively.
Mortgage lender Housing Development Finance Corp rose 0.3%, while private lender HDFC Bank slipped 0.2%.
Energy giant Reliance Industries which has the highest weight on the Sensex, rose 0.8% to Rs1,075.05.
Top engineering and construction firm Larsen & Toubro declined 0.4%, after rising 4.5% over 2 previous sessions.
Cigarette-to-hotel business ITC dropped 0.9% lower, after having gained 7.5% in eight earlier sessions.
In the broader market, declining shares outpaced advancing ones in a ratio of 1.2:1 in a volume of 405 million shares, lower than Wednesday’s volume.
World stocks slipped on worries about Greece not receiving European Union aid. By 4:28pm, MSCI’s all-country world index was down 0.2%, and pan-European FTSEurofirst 300 dropped 0.1%.