Markets end 0.4% up led by financials, auto

Markets end 0.4% up led by financials, auto

Mumbai: Indian shares logged their seventh straight weekly gains, rising 0.5% on Friday to their best close in more than 11 weeks, with financials and automakers leading the gainers, while top moble firm Bharti Airtel declined.

Firm Asian markets supported the gains.

The main index rose 0.4% this week, registering its longest streak of consecutive weekly gains since last June, buoyed by continued liquidity inflow and earnings optimism.

Bharti Airtel fell as much as 2.7% as the leading mobile operator moved closer to wrap up its $9 billion deal to buy most of Kuwaiti Zain’s African assets.

The deal could push up the Indian mobile operator by four notches to be the sixth largest mobile firm in the world by customers, but the management and finances will be stretched.

The 30-share BSE index closed 0.49% or 85.91 points higher at 17,644.76 points, its best close since 6 January. The 50-share NSE index closed 0.4% higher at 5,282 points.

Eighteen of its components closed in the green.

“There are expectations that we will see good March quarter results," said Jigar Shah, vice-president of equity sales at Motilal Oswal, a Mumbai-based brokerage.

“Also, FIIs (foreign institutional investors) have been consistently pouring funds, which has led to a liquidity-driven rally," said Shah.

Foreign funds have pumped in around $3.5 billion in Indian equities so far in 2010, a portion of which was absorbed by offerings in the primary market.

If March quarter earnings fell short of expectations, it would negatively impact the market, dealers said.

Financials gained on optimistic prospects in an advancing economy.

Top lender State Bank of India rose 1.1% while private lenders ICICI Bank and HDFC Bank gained 1.9% and 1.2% respectively.

Mortgage lender Housing Development Finance Corp rose nearly 1%.

Automakers rallied on expectations of robust sales for the current month.

India’s top vehicle maker Tata Motors raced 3.4% while top carmaker Maruti Suzuki and leading utility vehicle maker Mahindra and Mahindra climbed 1.8% and 2.2% respectively.

“Usually March auto sales are higher as institutional customers and those who buy for business purposes want to take advantage of higher depreciation," said Vaishali Jajoo, research analyst at Angel Broking.

“Also, this time there are fears that prices may go up in April due to new emission norms coming into effect and higher raw material prices," she added.

Bharti shares closed 1.2% lower at Rs310.15 after rising 0.7% earlier.

“The (Zain Africa) deal is extremely good from a long-term point of view, but the market generally does not like such deals because they could stretch the balance sheet," said Ambareesh Baliga, vice president at Karvy Stock Broking.

Energy major Reliance Industries, which has the highest weight on the main index gained 0.7% at Rs1,099.

In the broader market, declining shares outpaced advancing ones in a ratio of 1.4:1 on a volume of 446 million shares, higher than Thursday’s volume.

The MSCI’s measure of Asian markets other than Japan rose 0.6% by 4:24pm, while the FTSEurofirst 300 index of top European shares was down 0.5%.