Sensex near one-month high; blue-chip earnings key

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex closed near its highest level in a month on Monday led by gains in the country's largest consumer goods maker Hindustan Unilever Ltd and the largest two-wheeler maker Hero MotoCorp Ltd after their profits beat market estimates.

Gains also tracked European shares which rose as investors counted on easy money from central banks in the euro zone and United States to offset the risk of further disappointing global economic data, which still kept commodities under pressure.

The Reserve Bank of India's annual monetary policy review on Friday, where it is widely expected to cut rates by 25 basis points, will be crucial for shares this week, along with earnings of IDFC Ltd and Bharti Airtel Ltd , ACC Ltd and Ambuja Cements Ltd .

 

"Expectations of rate cut, more reforms and now forecast of normal monsoon are key for stocks in near term," said G. Chokkalingam, executive director and chief investment officer, Centrum Wealth Management.

The January-March quarter would mark the trough for the earnings cycle and probably the market may see some reversal in September, added Chokkalingam.

The benchmark BSE Sensex rose 0.52 percent, or 100.78 points, to 19,387.50, closing near its highest level of 19,406.85 in a month hit on Thursday.

The broader Nifty rose 0.56 percent, or 32.65 points, to 5,904.10.

However, Religare expects to see some correction in stocks in May due to macroeconomic headwinds. The BSE Sensex fell in six out of the last 10 years in the month of May.

Traders are also eyeing infrastructure output and fiscal deficit data for March due to be released on Tuesday for more cues.

Hindustan Unilever, the Indian unit of Anglo-Dutch Unilever Plc , rose 7 percent after it beat market forecasts with a 15 percent increase in quarterly net profit.

Hero MotoCorp rose 3.3 percent after the company's quarterly profit beat street estimates for the first quarter in six.

Bajaj Auto Ltd also rose 0.2 percent after a rub-off from Hero MotoCorp's results, dealers said.

Maruti Suzuki India Ltd gained 0.6 percent, rising for a second straight session, after its March quarter net profit beat estimates by a wide margin.

Technology shares gained, with the BSE IT index rising 1 percent on value buying after an 18 percent fall in April as of Thursday's close hurt by Infosys' poor earnings and outlook.

Infosys gained 0.8 percent, while HCL Technologies Ltd rose 2.4 percent.

Lanco Infratech Ltd rose 11 percent after its Australia unit, Griffin Coal, ended a litigation initiated by Perdaman Chemicals seeking Australian $3.5 billion for breach of a coal supply agreement.

However, among stocks that fell, Federal Bank lost 2.8 percent after the lender reported disappointing March quarter results on Saturday.

(Additional reporting by Archana Narayanan; Editing by Subhranshu Sahu)