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Shares up for 6th day; TCS, Infosys at record high

Shares up for 6th day; TCS, Infosys at record high
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First Published: Tue, Sep 14 2010. 04 19 PM IST
Updated: Tue, Sep 14 2010. 04 19 PM IST
Mumbai: Robust foreign fund inflows and an appetite for outsourcers sent the Bombay Stock Exchange (BSE) blue-chip index Sensex to a sixth straight higher close on Tuesday, its longest winning streak in three months.
While the long-term outlook was positive, some traders said stocks may soon see a correction in the near term with the index at a 32-month high.
A lower-than-expected rise in headline inflation WPI in August provided some comfort, but with inflation still above the Reserve Bank of India’s comfort zone, market expectations of a hike in key rates at the bank’s policy review on Thursday remain unchanged.
The BSE 30-share index added 0.72% or 138.63 points to 19,346.96, with two-thirds of its components closing in the green. It hit 19,487.02 points in early trade, its highest since January 2008.
“In the short run, the market has run up very fast. The breadth in the large cap space is not as promising as one would want it to be,” said Sandip Sabharwal, CEO of portfolio management services at brokerage Prabhudas Lilladher.
“A correction is likely in the next two weeks, but the long-term outlook is definitely optimistic.”
The benchmark index has scaled new 32-month peaks for three consecutive sessions and has added 10.8% so far in 2010.
Foreign funds have pumped in $13.7 billion so far this year, following the record inflow of $17.5 billion last year, which led to an 81% jump in the benchmark index.
Export-focused software firms rose, shrugging off comments from leading IT companies that though customers were spending on technology, the mood remained cautious.
Dealers said the firms gained on expectations of an improvement in the US economy, one of their key markets.
Leading outsourcers Tata Consultancy Services and rival Infosys Technologies touched all-time highs earlier in the day. TCS closed 1.7% higher, while Infosys and Wipro climbed 1.4% and 3.7% respectively.
Auto shares rallied on expectations of continued robust sales as the festive season approaches, when buying jumps sharply, dealers said.
According to Thomson Reuters data, vehicles maker Tata Motors rose to its highest level in at least 20 years before it closed 2.7% higher at Rs1,054.45. Top utility vehicle Mahindra & Mahindra scaled a record high and gained 1.4% at close.
Leading car maker Maruti Suzuki added 1.5%.
Financials closed mixed as imminent interest rate hike fears shadowed optimism over loan demand in a fast-growing economy.
Leading private sector lenders ICICI Bank and HDFC Bank climbed 0.3% and 2.3% respectively. Mortgage lender Housing Development Finance Corp firmed 1.3%.
Top lender State Bank of India bucked the trend and fell 1.1%.
Non-ferrous metals producer Sterlite Industries, a unit of London-based Vedanta Resources, rose 2.7% as HSBC Securities initiated coverage on the stock with an “overweight” rating.
The broader market’s breadth was weak with losers outnumbering winners in a ratio of 2:1 on a moderate volume of 467 million shares.
The National Stock Exchange (NSE) 50-share index Nifty climbed 0.6% to 5,795.55 points.
Elsewhere in the world, the pan-European FTSEurofirst 300 index of top shares edged 0.1% higher at 1028 GMT, while MSCI’s measure of Asian markets other than Japan was barely changed.
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First Published: Tue, Sep 14 2010. 04 19 PM IST
More Topics: Sensex | Nifty | BSE | NSE | Shares |