MUMBAI (NewsRise) -- Indian shares recorded their biggest weekly advance in more than four months after ending little changed on Friday as optimism over second-quarter earnings and record-low inflation cheered investors at home, while expectations of a gradual pace of rate increases in the U.S. lifted global sentiment.
The benchmark BSE Sensex came off record highs to slip 0.1%, or 16.63 points, to close at 32,020.75 points on Friday after Tata Consultancy Services lost 1.9% following a disappointing June quarter earnings. The index added 2.1% for the week. The broader NSE declined 0.1%, or 5.35 points, to 9,886.35 points, but ended the week 2.3% higher. Those were the best weekly gains since the week ended Mar. 17.
Bharti Airtel has been the top gainer on the Sensex since last Friday, rising 5.4%. Infosys added 3.9% this week. The company posted a slightly better-than-expected increase in first-quarter profit. Consumer goods sector stocks such as ITC rose 0.9% and Hindustan Unilever gained 3.8% after the implementation of India's Goods and Services Tax. Asian Paints, Coal India and Dr. Reddy's Laboratories were the only companies on the 30-stock Sensex to end the week lower.
India's gains this week followed advances across global equity markets after U.S. Federal Reserve Chair Janet Yellen's Congressional testimony affirmed bets the central bank will tighten policy slowly amid cooling inflation in the world's largest economy. The Nikkei Asia300 Index added 0.4% on Friday, to cap the week off with a 3.3% advance.
Even so, some market participants believe equities are headed for a correction as major central banks remain poised to scale back on policy accommodation.
"Global markets are positioned for a decline," said Amit Harchekar, founder and chief analyst strategist at A Plus Analytics. "India may underperform other markets once the high leverage unwinds."
Harchekar said the rally was "not really a sustainable one," adding that he expects shares to witness a 10% decline in the near future.
Sixteen of the 30 Sensex constituents ended lower on Friday, while overall declining issues beat advancing ones 1,701 to 996 while 125 remained unchanged.
Infosys fell 0.4% to 972.05 rupees after rising as much as 3.1% following its first-quarter results. On Friday, the Bengaluru-based company reported a 1.4% on-year increase in net profit and maintained its full-year revenue growth outlook at 6.5% to 8.5% in constant currency terms.
Larger rival Tata Consultancy lost 1.9% to 2,398.80 rupees after the company posted a decline of 5.9% in net profit for the June quarter. Morgan Stanley cut its earnings estimate for the company by around 2% over fiscal year 2018 through 2020. Wipro declined 1.8% ahead of its earnings in the next week.
State Bank of India and Punjab National Bank gained 1% and Bank of Baroda gained 1.1% on Friday. Private lender Axis Bank gained 0.2% and Kotak Mahindra Bank climbed 1.6%. Data released earlier this week showed India's retail inflation cooled to a record low sparking speculation of a possible rate cut in Asia's third-largest economy next month.
Biocon surged 8.9% to 399.20 rupees on Friday. The company expects the U.S. Food and Drug Administration to give a final approval to its copy of Roche's top-selling breast cancer drug Herceptin by September, its chairman and managing director said. Biocon expects the biosimilar to offer a $1-billion market opportunity in emerging markets, CNBC-TV18 reported.
Reliance Industries, India's biggest private company by revenue, gained 2.7% for the week ahead of its quarterly earnings and annual general meeting next week.
Bajaj Auto rose 0.7% to 2,810.05 rupees, Bajaj Finance gained 1.1% and Ultra tech Cement added 0.2% ahead of earnings next week.
--Dhanya Ann Thoppil