Markets rise to highest level since Feb 2008

Markets rise to highest level since Feb 2008

Mumbai: Indian shares rose to their highest level since February 2008 on Monday afternoon, helped by firm global markets, with financials leading the charge.

At 1:25pm, the 30-share BSE index was up 0.83% at 17,790.79 points, with 25 components advancing. It earlier rose to as much as 17,791.40 points.

The 50-share NSE index was up 0.8% at 5,326.10 points

Markets crept 0.2% higher on Monday, with resistance limiting the rise after the main index had posted its seventh consecutive weekly gain.

Traders said the market was underpinned by expectations for strong quarterly earnings.

Aluminium maker Hindalco rose 3.2% and non-ferrous metals producer Sterlite Industries gained 2.1% as London metals rallied, with copper rising to its highest since early January.

By 10:53am, the 30-share BSE index was trading up 0.15% at 17,671.76, with two-third of its components gaining. The 50-share NSE index was up 0.2% at 5,289.80.

The benchmark or Sensex, which had gained nearly 11% over seven weeks, climbed as high as 17,731.47 in early trade before hitting resistance.

“The fourth-quarter earnings and guidance are expected to be good. Things should get better from here," said Deven Choksey, managing director and CEO of KR Choksey Shares.

“Also, global liquidity flow has been buoyant," he said.

Export-focused outsourcers dropped on concerns a stronger rupee would hit their revenue. The rupee climbed to its strongest level in more than 18 months, boosted by the dollar’s weakness against major currencies.

Sector leader Tata Consultancy Services was down 1.1%, while rivals Infosys Technologies and Wipro fell 2.4% and 0.9% respectively.

The BSE index has risen 1.2% so far this quarter, helped by foreign fund inflows of around $3.7 billion.

It has outperformed the MSCI’s measure of Asian markets other than Japan and the MSCI’s emerging markets index that have risen 0.8% and 0.4% respectively so far in the quarter.

Earlier this month, a Reuters poll showed the BSE index may rise to 18,000 points by end-June and close 2010 at 19,250.

Financials shrugged off near-term inflation concerns and gained on positive long-term outlook in a growing economy.

Top lender State Bank of India and private lender HDFC Bank rose 0.9% and 0.6% respectively. Mortgage lender Housing Development Finance Corp climbed 1.5%.

Energy giant Reliance Industries, which has the highest weight on the Sensex, was up 0.4%.

In the broader market, gainers led losers in a ratio of 1.2:1 on volume of 122 million shares on the BSE.