Mumbai: Continued robust foreign portfolio investments and firm world equities helped Indian shares notch a 0.7% gain on Monday, led by financials and metal makers.
The No. 3 outsourcer Wipro slid as much as nearly 5% after brokerages such as Credit Suisse and JP Morgan downgraded their ratings on the stock after disappointing September-quarter results.
Shares of Wipro closed down 4.04% at Rs430.30.
“Despite repeated pronouncements and investments in its (Wipro’s) mega/gamma strategy intended to increase spending from its marquee clients, the contribution from key clients is still low and significantly trails that of peers, pulling down growth,” JP Morgan said in a note.
The 30-share BSE index firmed 0.68% or 137.26 points to 20,303.12, with 23 of its components closing in the green. The main index has risen 16.3% year to date and is just around 900 points shy of its record high.
“We are optimistic on Indian equities based on strong economic and corporate fundamentals,” said Vaibhav Sanghavi, director at Ambit Capital.
“The two key things to look out for are the upcoming Fed (US Federal Reserve) meet and the movement in international currencies.”
Foreign funds have pumped in nearly $24 billion into Indian equities so far in 2010, adding to record $17.5 billion inflows seen last year.
R.K. Gupta, managing director of Taurus Mutual Fund said the robust subscription to the Coal India’s $3.5 billion initial public offering, the country’s largest, has shown a lot of confidence in the strength of the market.
Coal India’s IPO was more than 15 times covered at close last Thursday, giving the government power to price at the top end of 225-245 rupees range and building momentum for other state offers.
Financials led the rally on expectations of credit demand growth in the world’s fastest growing major economy after China. Leading lenders State Bank of India and ICICI Bank rose 1.2% and 0.9% respectively.
Energy giant Reliance Industries, which has the highest weight on the Sensex, rose as much as 1.8% to Rs1,101, its highest level in more than six months.
The stock, which has underperformed the broader market rally for the year to date, closed 0.8% higher. It has gained only 0.1% so far this year.
Tata Motors climbed 2.8% as a spokesman said the vehicle maker’s Jaguar Land Rover is in talks with a Chinese automaker to establish a manufacturing and sales joint venture in China.
Dr Reddy’s Laboratories Ltd rose 1.3% after the No. 2 drugmaker by sales reported on Saturday a 32-percent jump in quarterly net profit, topping estimates.
Metal makers rose as base metals climbed in London and Shanghai with London copper at 27-month high, as a weaker dollar lifted commodity plays.
Non-ferrous metals producer Sterlite Industries and aluminium producer Hindalco rose 2.5% and 4.3% respectively. Tata Steel, world’s seventh-largest maker of the alloy, firmed 0.7%.
In the broader market, advancing shares outnumbered declining ones in the ratio of 1.4:1 on a robust volume of 457 million shares, provisional data showed.
The 50-share NSE index gained 0.7% to 6,105.80 points.
Elsewhere, the FTSEurofirst 300 index was up 0.4% by 1006 GMT, while the MSCI’s measure of Asian markets other than Japan gained 1.7%.
Hindustan Unilever, a unit of Anglo-Dutch group Unilever Plc rose 1.4% to Rs305.65, after posting a 32% rise in quarterly net profit, beating forecasts, thanks to a one-time gain.
Piramal Healthcare dropped 3.9% to Rs495.30 after the drugmaker said last week it planned to buy back up to 20% equity at Rs600 a share.
Software services firm Rolta India firmed 2.3% to Rs168.55 as it posted a 33% rise in September-quarter profit, surpassing analysts’ expectations, helped by investments in intellectual property and a sharp rise in revenue from enterprise IT solutions.
Mahindra & Mahindra Financial Services jumped 7.2% to Rs701.75 after the financial services provider reported a strong quarter driven by robust disbursements and as interest cost was contained.