Earnings hopes power Sensex past 17,000

Earnings hopes power Sensex past 17,000

Mumbai: The BSE Sensex climbed above 17,000 points on Wednesday for the first time since May 2008, led by banks and Reliance Industries on hopes that quarterly earnings would top expectations.

Shares in leading mobile firm Bharti Airtel rose 0.5%, as exclusive talks deadline loomed for a tie-up with South Africa’s MTN Group.

There is still little clarity about the outcome of the deal, which is facing increasing scrutiny in South Africa.

Oil India gained as much as 9.3% on its trading debut after the state explorer’s heavily subscribed $570 million IPO, potentially boosting government plans for selling stakes in other companies.

By 11:39am, the 30-share BSE index was up 1.13% at 17,043.74, with all but two components gaining. The index had started 0.09% higher.

It has risen 76.7% so far in 2009, making it one of the best performing indices in the region.

“There is visibility in terms of earnings which is adding to the confidence," said Rajesh Jain, chief executive at Pranav Securities.

Companies begin releasing their quarterly results from the second week of October, and advance tax payments indicate robust profits.

Top lender State Bank of India led the gains, climbing 2.8% to Rs2,149.25 as investors expected strong corporate earnings to boost the bank’s profits and ease bad debt worries.

ICICI Bank rose 1.2% to Rs874.50.

“The markets could do very well to take a correction ahead of the results but every dip sees fresh buying. The advice is to stay invested and review global markets, liquidity and Indian festival demand before buying again," Jain said.

Energy giant Reliance Industries gained 1.2% to Rs2,191.30. Tata Consultancy Services rose 0.7% to Rs614.70 after the top software exporter said it signed a multi-million dollar contract with a Singapore state organisation.

Software bellwether Infosys added 1.4% to Rs2,319.10.

The strong debut of Oil India helped larger rival Oil and Natural Gas Corp climb 1% to Rs1,197.75.

Bharti was up 0.5% at Rs420.9.

In the broader market, 1,570 gainers were ahead of 849 losers on relatively low volume of 164.5 million shares.

The market was shut on Monday for a local holiday and will be closed on Friday for Mahatma Gandhi’s birth anniversary. Analysts said the holidays would keep investors cautious.

The 50-share NSE index rose 0.88% to 5,051.45.