Indian shares rose for the fifth straight session on Monday, ending 0.58 per cent higher, after last week’s robust US jobs data helped improve risk appetite, but the rally in the local market is expected to take a breather soon.
The main 30-share Bombay Stock Exchange (BSE) index Sensex closed up 102.35 points at 17,707.31, with 21 of its components advancing.
The benchmark has gained nearly 15 per cent this year, with foreign funds pouring more than $3 billion into Indian equities. In 2011, the index fell a quarter as foreign portfolio investors pulled out a net $500 million.
The National Stock Exchange index ended up 0.7 per cent at 5,361.65. In the broader market, there were 976 gainers against 486 losers on volume of 986 million shares.
“There is optimism, retail investors are coming back to the market. However, this is nothing to be thrilled about, we are only recovering the lost ground,” said Arun Kejriwal, strategist at research firm KRIS. “But this is a worrisome trend, as during this period, nothing much has happened which justifies optimism of this magnitude,” he added.
Bank stocks led the rise, with State Bank of India rising 2.83 per cent and ICICI Bank ending up 1.28 per cent.
“Most banks have come out with good results,” said Deven Choksey, managing director of brokerage K R Choksey. Expectations that the central bank will cut interest rates also helped bank stocks, he added.
Most auto stocks also ended higher, with carmakers Tata Motors and Maruti Suzuki rising 1.66 per cent and 0.96 per cent, respectively.
“Banking, cement, power and construction and some select telecom stocks are at attractive valuations,” said Samir Gilani, head of equities and derivatives at Mape Securities.
Piramal Healthcare closed down 1.14 per cent after rising more than seven per cent.
The drugmaker said on Saturday it would buy a 5.5 percent stake in Vodafone's India unit from Essar for 30 billion rupees.
“We have seen a pretty good run and the overall trend is still up, both in India and globally. But markets will take a breather from here before climbing up further. The sentiment has changed to ‘buy on dips’," Samir Gilani said. “We going to pause somewhere here,” he said. Hindustan Unilever fell 3.57 percent, despite reporting a better-than-expected net profit. The consumer goods maker lowered its spending on advertising and promotions in the quarter, raising concerns it may not be able to hold on to its market share.
The MSCI's broadest index of Asia Pacific shares outside Japan fell 0.08 percent, while Japan's Nikkei rose 1.10 percent.
