Mumbai: Indian shares closed up nearly 2% in firm trade on Thursday, snapping a two-session fall, on a broad rally triggered across sectors by stable foreign fund inflows.
Financials were among the top gainers, with State Bank of India (SBI) and ICICI Bank Ltd closing up 1.6% and 1.34%, respectively.
Over the past six months, shares of SBI have fallen 12.6%, while those of ICICI Bank have fallen 2.3% on worries over rising interest rates hitting loan growth.
Energy major Reliance Industries Ltd (RIL) closed up 2.09% after an oil ministry source said India’s cabinet may consider approval for a $7.2 billion deal between the company and BP Plc next week.
Concerns over RIL’s gas production have for months dampened its growth outlook and kept its shares under pressure. The stock has fallen 19.4% year-to-date.
“There is no specific reason for the market to rise. The market is rising after seeing two-three days of consolidation,” said Neeraj Dewan, director at Quantum Securities Ltd.
“FII (foreign institutional investor) buying must also be happening with the kind of momentum you are seeing.”
Foreign funds have bought Indian shares worth $2.2 billion (around Rs 9,768 crore) over nine sessions to Tuesday, data from the market regulator showed, pushing the main index higher.
The 30-share Bombay Stock Exchange (BSE) Sensex closed up 1.88% at 19,078.30 points, with 29 of its components gaining ground.
The index has fallen 0.5% over the past two sessions and has shed 7.3% of its value year-to-date. “The market will consolidate, correct a little bit and then keep on going up,” Dewan added.
The software services sector also gained with bellwether Infosys Ltd, which flags off first quarter earnings on Tuesday, closing up 1.42%.
Bigger rival Tata Consultancy Services Ltd (TCS) ended up 1.11%, while third largest software services firm Wipro Ltd closed up 1.46%.
“We expect good June quarter results and commentary from large-caps with TCS continuing to lead,” brokerage JPMorgan Chase and Co. said in a research report this week.
“IT (information technology) spend, particularly discretionary spending, outlook is likely to remain strong despite macro concerns and weakness in consumer spending,” the brokerage added.
India’s biggest and only listed microlender, SKS Microfinance Ltd, rose as much as 20% to Rs 411.80 after the finance ministry issued a draft of regulation proposed for the sector.
The 50-share National Stock Exchange (NSE) index was up 1.84% at 5,728.95 points.
A total of 988 gainers led 421 losers in a volume of 593 million on NSE, higher than the 90-day daily average volume of 529 million shares.
The MSCI World Equity Index was up 0.09% at 1044 GMT, while the Thomson Reuters global stock index rose 0.06%.
Entertainment Network (India) Ltd and Reliance Broadcast Network Ltd rose 5.36% and 7.34%, respectively, after the cabinet raised foreign direct investment limit in the FM radio sector and gave the green light to more radio spectrum auction.
Elder Health Care Ltd rose 19.97% to Rs 141.20 after CNBC-TV18 television channel reported the company was planning to launch a range of new products in the skincare and other segments.