Indian shares rise to record as software exporters rebound
MUMBAI (NewsRise) - Tata Consultancy Services and rival software exporters rebounded Monday to lift Indian stocks to a record, despite a technical glitch briefly disrupting trades at the nation's largest bourse.
The benchmark BSE Sensex gained 1.1%, or 355.01 points, to close at 31,715.64. The broader NSE index rose also added 1.1%, or 105.25 points, at 9,771.05. A snag hampered trading on the National Stock Exchange earlier in the day, prompting the bourse to shut both its cash and derivatives segment trading at 9:55 a.m. local time. The trading resumed at 12:30 p.m.
The exchange said the matter is being examined by an internal technical team as well as external vendors.
India's largest software services provider Tata Consultancy added 4.7% ahead of its quarterly earnings due on Thursday. Rivals Infosys and Wipro added 2.5% and 4.6%. Information technology stocks gained despite a number of analysts forecasting subdued revenue and profit for the sector amid rising costs and weak technology spending in key markets. Deutsche Bank on Friday cut its full-year earnings estimates for IT services companies by 0.3% to 7%, citing the rupee's strength against the dollar.
The Securities and Exchange Board of India late Friday banned holders of offshore derivatives tied to the nation's equities from taking unhedged exposure and said existing bets must be liquidated by the end of 2020 or by the date of maturity of the instrument.
Monday's gains also follow advances in U.S. indices on Friday after a better-than-expected employment data boosted sentiment. Most other regional markets rose, with the Nikkei Asia300 Index adding 0.4%.
"The Indian market could be witnessing inflows from foreign investors. The ratio of foreign investments is 1:2 for equity and debt, and there could be a possibility that this is changing and investors are moving to equity markets," said G. Chokkalingam, founder and managing director at Equinomics. "The NSE technical glitch did not have any major impact. The earnings picture does not look great and may not show any improvement until October."
Twenty-seven of the 30 Sensex constituents ended higher on Monday, while overall advancing issues outnumbered declining ones 1,540 to 1,112 while 158 remained unchanged.
Drugmaker Lupin rose 3% to 1,149.75 rupees, adding to last week's more than 5% jump. The company announced in an exchange filing that it received final approval for its Flucytosine Capsules from the United States Food and Drug Administration.
Sun Pharmaceutical Industries added 2.4% to 563 rupees. The company has entered into settlements with certain plaintiffs in antitrust litigation matter currently pending in the U.S., one of its biggest markets, according to an exchange filing.
Tata Motors gained 2.3% to 446.75 rupees. Over the weekend, the company's luxury car unit Jaguar Land Rover reported an 11% on-year increase in total sales for June. Nomura maintained a `buy' rating on the stock.
Mobile phone operator Bharti Airtel hit a 52-week high, rising 5.4% to 405.40 rupees. Analysts at Nomura expect Airtel's earnings before interest, taxes, depreciation and amortization to rise 10% in the April-June quarter, but profit after taxes to come in unchanged from the year ago.
Bharti's rival Reliance Jio reportedly suffered a data breach as a website claimed it has access to Jio users' details. Reliance Industries added 0.1%.
IDFC Bank gained 0.7% to 65.20 rupees, while IDFC ended down 5.7% at 56.50. IDFC group and Shriram Group are exploring the possibility of a merger over the next 90 days through a three-tier structure, the companies said over the weekend.
Oil & Natural Gas Corp. gained 2% to 162.80 rupees. ONGC Videsh, the company's international arm, received a two-year extension for exploring a Vietnamese oil block.
Reliance Communications surged 7.3% to 24.40 rupees after the company presented a long-term debt reduction plan to lenders, which included sale of real estate, under-sea cable assets and DTH business, reported Economic Times.
CARE Ratings climbed 7.2% at 1,689.90 rupees after Economic Times reported that U.S rating firm Fitch showed interest to buy into the Mumbai-based rating agency.
State-run Bank Of India jumped 5.6% to 149.20 rupees. State-run insurance behemoth Life Insurance Corp. of India bought an additional 3% stake in the lender for about 4.51 billion rupees at June end.
--Dhanya Ann Thoppil