Shares hit 32-month high; banks, techs up

Shares hit 32-month high; banks, techs up

Mumbai: Indian shares climbed to 32-month highs for the third consecutive session on Tuesday, but met with resistance as investors began locking in profits. Financials led the gainers.

By 10:33 am, the BSE 30-share index Sensex was trading up 0.52% at 19,307.88, with 22 of its components rising. It had hit 19,487.02 early, its highest since January 2008.

“Fund flow is what is driving the market higher," said Ambareesh Baliga, vice president of Karvy Stock Broking.

Foreign funds have poured in $13.7 billion so far in 2010, pushing the BSE index more than 10% higher.

This follows a record inflow of $17.5 billion last year, which led to an 81% jump in the BSE benchmark.

Export-focused outsourcers rallied, shrugging off comments from leading IT companies that customers were spending on technology but the mood remained cautious.

Sector leader Tata Consultancy Services and rival Infosys Technologies climbed to record highs on expectations of improving economic scenario in the United States, the world’s largest economy.

TCS was up 1.2%, while Infosys and Wipro gained 2.2% and 1.9% respectively.

Dealers said the undercurrent was bullish after July industrial output data beat market expectations by a wide margin.

“It looks like there is more rise in store. We are still to see the euphoria," Baliga said.

Financials rose on continued hopes loan demand will rise as the economy expands, and a possible rise in interest rates by the Reserve Bank of India (RBI) when it reviews policy on Thursday is unlikely to dent the outlook.

Leading private-sector lenders ICICI Bank and HDFC Bank firmed 0.5% and 1.7% respectively. Mortgage lender Housing Development Finance Corp firmed 0.7%.

Nearly two shares were trading lower for every share that advanced on volume of 138 million shares.

The NSE 50-share index Nifty was up 0.3% at 5,778.65.