Bangalore: Shares closed 0.4% higher on Monday, for a second straight session, lifted by robust foreign fund inflows and firm world equities on signs of US economic recovery, with metal makers leading the gains.
Prospects of firm metal prices due to supply constraints powered the metals pack, dealers said, which pushed the sector index 2.2% higher.
The 30-share BSE index firmed up 72.20 points at 20,117.38, with 19 of its components advancing and one remaining unchanged. It rose 1.1% to 20,267.98 points, the highest since January 2008, intra-day. The 50-share NSE index was up 0.3% at 6,035.65 points.
“The momentum is strong in the market thanks to the foreign institutional investor money and will continue till that money stops,” said Neeraj Dewan, director of Quantum Securities.
“There is no reason for a big correction right now.” Foreign funds have pumped in $17.7 billion in Indian equities so far in 2010, topping the record $17.5 billion inflows in 2009 that led to an 81% rally in the benchmark index.
This year, the main stock index is up more than 15% from a year earlier.
“But I do not see too huge an upside from here,” Dewan said, adding the market could go up another 500 points or so before it took a breather.
The market’s next trigger would be the September-quarter earnings season which begins next month, dealers said.
Aluminium maker Hindalco Industries closed up 3.3% at Rs197.25, after touching Rs199.45 -- its highest since January 2008. Non-ferrous metals producer Sterlite Industries, a unit of London-listed Vedanta Resources, gained 3.2% and Tata Steel, the world’s seventh-largest maker of the alloy, rose 2.6%.
Index heavyweight Reliance Industries Ltd, which had not seen much uptick in the recent rally, closed 0.8% higher as it played catch up, dealers said.
The Mint newspaper reported the energy major plans to invest over Rs 400,00 crore by 2014 to expand the world’s biggest refining complex it runs in Jamnagar, in western Gujarat state.
Financial stocks ended mixed as investors selectively booked profit in a sector which is riding a robust loan demand outlook in the world’s second-fastest growing major economy.
Top lender State Bank of India gained 1.1% while leading private lender ICICI Bank rose 0.2%. But, No. 2 private sector bank HDFC Bank and mortgage lender Housing Development Finance Corp shed 2.1% and 0.6% respectively.
Export-dependent technology firms that reap most of their revenue from the United States, gave up early gains as the rupee touched a 4-½ month high against the dollar. They had gained in early trade after data showed a strong revival in business spending plans in August.
Sector leader Tata Consultancy Services and Infosys Technologies closed down 0.5% each, while Wipro lost 0.3%. Another outsourcer Mahindra Satyam shed more than 9% after it said late Friday it would delist from the New York Stock Exchange in mid-October due to non-compliance as it would likely miss a deadline to restate results for fiscal year 2009.
Earlier called Satyam Computer, the outsourcer’s board will review its earnings for fiscal years 2009 and 2010 on 29 September when investors would get their first peek into the audited financial results at the firm that was hit by India’s biggest corporate scandal nearly two years ago.
In the broader market, advancers nearly equalled laggards on volume of 509.5 million shares.
Elsewhere, the FTSEurofirst index of top European shares was up 0.04% by 5:13pm, while the MSCI’s measure of Asian markets other than Japan firmed 1.4%.
Navin Fluorine surged nearly 16% after its board approved late Friday a buy back of up to 10% of its paid-up capital at Rs400 a share. The shares closed 11% higher at Rs323.80.
Hindustan Construction Co Ltd rose 3.8% after it said late Friday that it had won two orders totalling Rs660 crore ($147 million) from GMR (Badrinath) Hydro Power Generation Pvt. Ltd, New Delhi, for Alaknanda Hydro Electric Project. The shares ended up 1% at Rs60.80.