Mumbai: Indian shares climbed 0.7% on Thursday as confidence returned to world markets, with financials leading the way on hopes a growing economy will boost demand for loans.
Sentiment got a boost after Spain and Portugal promised austerity measures and helped reduce fears the Greek debt crisis could spread elsewhere in the continent.
“Our market has been moving as per the cues from global markets and the trend will continue for a while,” said Neeraj Dewan, director of Quantum Securities. “The monsoon should be the next trigger.”
The annual June-September rains are the main source of irrigation in India. The monsoon is forecast to be near normal this year. In 2009, the worst rainfall in 37 years had dented farm output and hit rural incomes.
By 11:18am, the 30-share BSE index was trading up 0.74% at 17,323.76, with 26 of its components gaining. The 50-share NSE index was up 0.7% at 5,193.05.
The benchmark is down 0.8% so far this year, despite foreign funds buying nearly $6 billion of stocks. In 2009, it had jumped 81% on record inflows of $17.5 billion.
The MSCI’s measure of Asian markets other than Japan rose 1.8%, while Japan’s Nikkei firmed 2.3%.
Top lender State Bank of India rose 0.5%, while rivals ICICI Bank and HDFC Bank climbed 1.3% and 0.6% respectively.
Mortgage lender Housing Development Finance Corp rose 0.7%.
“Most banks have come up with good results and guidance has pointed to improving credit offtake,” Dewan said.
Leading telecom operator Bharti Airtel crawled back 2.1% after tumbling 8.3% on Wednesday. A plan to slap new fees on second-generation mobile spectrum in India drew howls of protest from carriers.
Energy giant Reliance Industries, which has the highest weight on the Sensex, climbed 0.2% to Rs1,084.
Metals makers climbed as prices on London Metals Exchange rose, with copper reversing the previous session’s losses to rise 0.7%.
Non-ferrous metals producer Sterlite Industries and aluminium maker Hindalco rose 0.3% and 0.9% respectively.
Tata Steel, the world’s eighth-largest steel maker by output, rose 0.6%.
In the broader market, gainers outnumbered losers in a ratio of 2.4:1 on volume of 103 million shares.