The arrival of monsoon in North India and firm global cues pushed up domestic equity indices by one per cent. The 30-share Sensex of the Bombay Stock Exchange (BSE) gained 173 points to close at 17,614. The broader index, Nifty of the National Stock Exchange (NSE), rose 53 points to 5,289, led by software, metal and financial sector companies.
Market players said if global cues remained supportive and the Nifty inched close to 5,350, there could be a significant upward move.
According to provisional BSE figures, foreign institutional investors were net buyers of stocks worth Rs 342 crore in the cash segment.
“The markets are completely driven by liquidity. If there is no negative news, stock prices may move upwards. The Nifty could move between 5,200 and 5,400 in the near term,” said Ridhim Thappar, head of institutional sales at Mumbai-based A K Capital.
Key equity indices in Europe, the UK, France and Germany were up 2.4-3.2 per cent, with commodity-sector stocks being the best performers. In Asia, the Shanghai Composite was up 1.92 per cent, Taiwan Weighted rose 1.46 per cent, Hang Seng gained 1.22 per cent and Nikkei 225 climbed 0.77 per cent.
Annual monsoon, vital to India’s trillion-dollar economy, hase covered the country after an initially sluggish spell, boosting the outlook for farm products and rural income. The June-September rain advanced into the key grain-producing states of Punjab and Haryana, narrowing the shortfall since June 1 to 13 per cent from 16 per cent earlier.
Mumbai-based broking firm Edelweiss expects 6.1 per cent year-on-year earnings growth for the Sensex in the June quarter. “Although, growth is expected to be strong on a year-on-year basis, there seems to be some softening in the earnings growth trajectory,” said Edelweiss in a note on Monday.
Foreign funds have invested a net of $6.8 billion in Indian equities so far in 2010, with primary market offerings absorbing a share. The main index is up 0.9 per cent so far this year. The funds had poured in a record $17.5 billion in 2009, which had fuelled a rally of 81 per cent.
Leading lender State Bank of India gained 1.8 per cent, while private-sector rivals ICICI Bank and HDFC Bank climbed 2.1 per cent and 2.4 per cent, respectively.
Expectations of revenue growth for the June quarter pushed up export-focused outsourcing firms. Kotak Securities said it expected 5.2 per cent to 6.7 per cent constant currency revenue growth for Tier-I information technology companies in the June quarter.
Sector leader Tata Consultancy Services rose 2.5 per cent, while smaller rivals Infosys Technologies and Wipro climbed 1.6 per cent each.
Metal stocks rallied, as copper rose to its one-week high on the London Metal Exchange. Non-ferrous metals producer Sterlite Industries gained 1.6 per cent, while aluminium maker Hindalco rose 1.5 per cent. Tata Steel was up 1.8 per cent.
Reliance Industries, the highest-weighted stock in the index, climbed 0.5 per cent to Rs 1,072.60. In the broader market, gainers led losers in a ratio of 1.3:1 in a relatively lower volume of 383 million shares.
