The Bombay Stock Exchange’s Sensitive Index rose the most in three weeks On Thursday, led by software developers on expectations that earnings growth would recover.
Wipro, the nation’s third-largest software developer, gained 11 per cent, the most in almost five years after Morgan Stanley and ICICI Securities raised their target prices on the stock. Reliance Industries, the most valuable company, added 3 per cent while ICICI Bank, the No. 2 lender, rose 7.6 per cent amid speculation that investors who bet on a fall in prices bought equity to square so-called short sales.
“Short-covering is driving the markets higher On Thursday,” said Jayesh Shroff, who helps manage $5.5 billion in assets at SBI Asset Management Company. “Technology shares have got a boost after Wipro gave a better outlook for the industry than its rivals.”
The Sensex added 2.9 per cent or 317.45 points to 11,134.99, the most since April 2. The S&P CNX Nifty Index on the National Stock Exchange climbed 2.8 per cent to 3,423.70. The BSE 200 Index gained 2.6 per cent to 1,320.88. Nifty futures for April delivery rose 3.7 per cent to 3,445.90.
Indian companies had their earnings estimates raised for the first time in more than a year and further upgrades may signal that share prices have “bottomed out,” JPMorgan Chase analysts led by Bharat Iyer wrote in a report yesterday.
Wipro rose 11 per cent to Rs 312.90, the most since May 18, 2004. Morgan Stanley raised the stock’s price target by 14 per cent while ICICI Securities increased its price forecast by 9.4 per cent.