Mumbai: Indian shares rose 1.1% on Friday, with telecom stocks cheering an upgrade by Credit Suisse, and Infosys Technologies testing new high on better earnings expectations ahead of its quarterly results next week.
Top mobile operator Bharti Airtel soared as much as 10.4%, while rivals Reliance Communications and Idea Cellular climbed as much as 3.9% and 14.7% respectively.
Credit Suisse upgraded Bharti to “outperform” from “neutral”, Reliance Communications to “neutral” from “underperform”, and Idea Cellular to “outperform” from “underperform”.
“We believe that concerns on competition, regulation, 3G auction fee and RIL’s entry have been overstated,” Credit Suisse said in a note on Thursday.
By 11:59am, the 30-share BSE Index was trading up 1.05% at 17,836.50 points, with 25 of its components in the green. The 50-share NSE index was up 1% at 5,351.95 points.
“There are expectations built that IT and telecom stocks may surprise market on the positive side at June-quarter results,” said Deven Choksey, managing director and CEO of KR Choksey Shares. “As far as telecom stocks are concerned, the valuations are cheap. All negatives are priced in, and prices cannot dip from here.”
The benchmark is up 2.2% so far this week. It has gained 0.8% this month on the back of around 107 million inflows from foreign funds.
IT bellwether Infosys, which unveils its quarterly earnings on 13 June, rose as much as 1.9% to a record high of Rs2,879.90. Its earnings are often dubbed as a trendsetter for the sectoral peers.
“We expect robust results from Tier 1 IT vendors to demonstrate the underlying demand strength,” Macquarie said in a note. It expects Infosys to raise fiscal year 2011 US dollar revenue growth guidance to 17-19% from 16-18%.
Its peers Tata Consultancy Services and Wipro rose 0.1% and 0.9% respectively.
Lenders continued to rise on expectations that credit demand would pick up on the back of robust economic growth.
The country’s top lender State Bank of India was up 0.8% while leading private-sector rivals ICICI Bank and HDFC Bank gained 0.8% and 1.6% respectively.
Bajaj Auto rose 0.5% after the auto player signed an agreement with Renault-Nissan alliance to manufacture an ultra low-cost car to be sold in India and other emerging markets, which would be a rival to Tata Motors’ Nano.
In the broader market, gainers were nearly double the losers in a volume of 191 million shares.
Pratibha Industries was up 1.1% at Rs415 as the construction firm said it has won a project from National Highways Authority of India for two-laning of a section of NH-86.
KPIT Cummins Infosystems rose after the software firm said on Thursday it is considering buying a German automotive product company with revenue earnings below $5 million at its board meeting scheduled on 13 July.