Sensex gains on upbeat Infosys results; inflation next

By Abhishek Vishnoi

MUMBAI (Reuters) - The Sensex provisionally edged up on Friday after touching its highest intraday level in nearly a week as software services exporters rose after Infosys Ltd's quarterly earnings beat market expectations.

However, broader gains on Friday were capped after banking shares fell 1.5 percent on caution ahead of key inflation data next week, which are critical ahead of the Reserve Bank of India's interest rate decision on January 28.

Worries on India's economy also lingered as its trade deficit widened in December, raising fears it could pose pressure on the country's fragile current account balance. November factory data is due later in the day.

 

Traders are also waiting for a key report on U.S. jobs later in the day.

"Easing inflation part is widely known while fiscal deficit has seen rapid acceleration. Shares may remain subdued as only IT and pharma are performing while rest of the market remains weak," said Phani Sekhar, a fund manager at Angel Broking.

The Sensex rose 0.22 percent, or 45.12 points, to 20,758.49. For the week, the index fell 0.44 percent marking its second consecutive weekly fall.

The Nifty rose 0.05 percent, or 3.1 points, to 6,171.45. It has lost 0.64 percent for the week.

Both indexes earlier hit their highest intraday level since January 2.

Infosys gained 2.9 percent after the second-largest Indian software services exporter posted a 21 percent rise in quarterly net profit, beating analysts' estimates.

Wipro gained 2.3 percent while Tata Consultancy Services rose 1.7 percent. HCL Technologies ended 1 percent higher.

ITC rose 2.2 percent on value buying after falling nearly 6 percent since October until Thursday's close compared with a 2.1 percent fall in the NSE index in the same period.

Manappuram Finance surged 20 percent, its maximum daily limit, for a second consecutive day after the central bank relaxed gold-lending rules for non-bank finance companies.

Bank of America Merrill Lynch upgraded the stock to 'buy' from 'underperform' and raised its target to 25 rupees from 13.1 rupees after the RBI move.

Shares in Muthoot Finance , another gold-based lender, rose 7.7 percent adding to Thursday's 20 percent surge.

However, among stocks that fell, Jubilant FoodWorks Ltd ended 3 percent lower after earlier marking its lowest intraday level since November 5 as index provider MSCI excludes the Domino's Pizza franchisee in India from its small cap indexes.

Hindalco Industries Ltd fell 2 percent after its global peer Alcoa Inc , the largest U.S. aluminium producer, reported a massive quarterly loss on Thursday and gave a stagnant outlook on global aluminium demand.

(Editing by Gopakumar Warrier)