Markets rise for third month in a row

Markets rise for third month in a row

Mumbai: Indian shares rose for the third straight month as it closed 0.3% higher on Friday, helped by gains in Asian equities, with financials and outsourcers leading the charge.

But, the rise was limited as European equities edged lower towards the close of Indian markets. Asian equities marched ahead on expectations that a bailout package for Greece was on its way.

Financials climbed on hopes that the world’s fastest growing major economy after China, would see higher demand for loans and rising incomes would slow down consumer defaults.

Top lender State Bank of India climbed 1%, while private sector rivals ICICI Bank and HDFC Bank climbed 0.6% each.

The 30-share BSE index rose 0.32% or 55.24 points to finish at 17,558.71 points, taking gains in April to 0.2%. Seventeen of its components closed in the green.

The benchmark had risen 0.4% in February and 6.7% in March.

“The trend should continue in the next month. Good earnings and economic growth are key drivers," said Rakesh Rawal, Bangalore-based head of private wealth management at Anand Rathi.

“The results have been good and what is important is that the outlook is even better."

Rawal does not expect input costs due to higher commodity prices to significantly affect margins in the current quarter.

“Even if input costs may rise, there is pricing power. So, there is no big reason to worry," he said.

In 2009, foreign fund investments of a record $17.5 billion had led to a spectacular 81% rise in the benchmark.

Foreign funds have pumped a net $6.3 billion into Indian stocks so far in 2010, mostly since the start of March, on forecast for 8.5% economic expansion in the fiscal year 2010-11 that started on 1 April.

Two initial public offerings -- state-run utility Satluj Jal Vidyut Nigam and road builder Jaypee Infratech -- to raise a combined $770 million saw most bids coming towards the low end of their respective price ranges as they kicked-off book-building on Thursday.

Outsourcers Tata Consultancy Services and Infosys Technologies, which derive a significant portion of their revenue from the US, were up 0.8% and 1.1% respectively.

“IT stocks seem to have benefitted from expectations that US GDP data (advance reading) may turn out to be better, pointing that the order inflows may rise," said Harit Shah, a research analyst with Karvy Stock Broking.

Tata Motors rose 3.6%, after rival Ashok Leyland said its March quarter net profit quadrupled on higher sales, leading to expectations that the top vehicle maker may follow suit.

Energy giant Reliance Industries, which has the highest weight on the Sensex, dropped 0.2 % to Rs1,032.50.

Non-ferrous metals maker Sterlite Industries climbed 0.5% as copper prices rose in London.

In the broader market, gainers outnumbered losers in the ratio of 1.4:1 in a volume of 458 million shares, higher than Thursday’s volume.

The 50-share NSE index gained 0.5% to 5,278 points.