Markets rise to 2-1/2 yr high; up for 3rd week

Third-largest outsourcer Wipro rose as much as 4.2% as it posted a forecast-beating, 31-percent rise in quarterly profit and said it was seeing strong business environment, pulling up sectoral stocks early.

But, profit sales dragged down shares which closed 0.8% lower at Rs412.10, preventing the stock from breaching Rs451.80, its highest level in a decade according to data from Thomson Reuters.

Wipro’s upbeat results had pushed the sector leader Tata Consultancy Services to a record high of Rs850 in the day. TCS closed 0.5% lower at Rs838.50 while Infosys Technologies firmed 0.9%.

The 30-share BSE index rose for the third day and closed 0.1% or 17.83 points higher at 18,130.98 -- after hitting 18,237.56 -- its highest level since February 2008.

In the broader market, losers outnumbered gainers in a ratio of 1.5:1 in a relatively better volume of 453 million shares.

The benchmark gained nearly 1% for the week. Fourteen of its components advanced. It is up 3.8% so far in 2010, as foreign funds invested a net of $8.8 billion into Indian equities. In 2009, they had bought a record $17.5 billion of stocks and helped power an 81% rally.

For the year to date, the BSE index has outperformed MSCI’s broader index for Asian markets ex-Japan and emerging markets index .MSCIEF which have declined 4.4% and 1.6% respectively.

“Profit booking cannot be ruled out at these levels. Trade next week is likely to be volatile as we have a number of events scheduled," said R.K. Gupta, managing director of Taurus Mutual Fund.

Gupta was referring to Reserve Bank of India’s quarterly monetary policy review on Tuesday, expiry of monthly derivatives contracts on the National Stock Exchange on Thursday and a slew of key corporate earnings. For the week to July 21, Emerging Market Equity funds took in more than $800 million for a second week in a row, GEM Equity Funds absorbed $796 million, data from fund tracker Global showed.

The 50-share NSE index , or Nifty, rose 0.1% to 5,449.10 points.

At 3:49pm the FTSEurofirst 300 index of top European shares was up 0.1% in cautious trade. Bharti Airtel (BRTI.BO) rose 3.9% on expectations the top mobile operator may post better-than-expected results for the June quarter, dealers said.

Financials closed mixed. A top Indian government adviser called for strong monetary policy action to combat high inflation, days before the central bank is set to raise rates for the fourth time this year.

Top lender State Bank of India rose as much as 1.1% to a record high of 2,504 rupees. Rival ICICI Bank edged 0.3% higher. Private sector lender HDFC Bank and mortgage lender Housing Development Finance Corp shed 0.8% percent each.

Top-listed biotechnology firm Biocon shed 3.2% after it reported a lower-than-expected 33% rise in quarterly net profit.

Cigarette-to-hotel group ITC added 1% after rising 1.6% on Thursday following a 22-percent rise in quarterly net profit.

STOCKS

Bharat Heavy Electricals rose 1.7% to Rs2,460.45 as the top power and engineering equipment firm posted a forecast-beating 42% rise in its June quarter net profit.

Dr Reddy’s Laboratories shed 1.1% to Rs1,364.90, extending losses after the drugmaker said on Thursday consolidated quarterly profit fell a more-than-expected 14.3% following a drop in sales in its key US market.

State-run Uco Bank jumped as much as 7.4% to a record high of Rs92.80 as it said is April-June net profit rose 45%.

State-run lender Allahabad Bank rose as much as 5.5% to an all-time high of Rs187.95 after it said its June quarter net profit rose 15%. The stock closed 3.9% higher at Rs185.15.

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