The benchmark indices climbed more than a percentage point on Friday, led by a rally in IT stocks on the back of Infosys? robust Q2FY14 revenue growth performance. The benchmark BSE Sensex ended the week with gains of over 3%, its second consecutive weekly gain.
Infosys reported a y-o-y rise of 1.6% in its consolidated net profit at R2,407 crore on Friday. The firm’s dollar revenues grew 3.8% q-o-q against consensus estimates of 2.5%. Infosys shares gained 4.8% to R3,273 ? its highest level in nearly two-and-a-half years. Investor sentiment was positive towards other IT stocks as well with the BSE IT Index rallying 3.12%. Shares of TCS (2.04%), Tech Mahindra (2.21%) and HCL Technologies (3.44%) touched their 52-week-highs.
The BSE Sensex closed at 20,528 on Friday, up 256 points, or 1.26%, over the previous day’s close, while Nifty ended up 75 points, or 1.25%, at 6,096. Indian equities also gained from positive global cues with US President Barack Obama holding talks with Republicans to reach an agreement on US debt ceiling standoff.
On Friday, foreign institutional investors (FIIs) were net buyers of shares worth $165 million, while domestic institutional investors sold shares worth $89 million, according to provisional data from the BSE. In year-to-date, overseas investors are net buyers of about $13 billion worth of Indian equities.
Apart from IT stocks, banking scrips too gained between 1% and 5%. ICICI Bank was up 5.01%, Bank of Baroda (4.95%), IndusInd Bank (3.05%), Federal Bank (4.69%), Axis Bank (3.06%) and State Bank of India (1.14%) were among the other gainers.
Realty stocks also gained after the Securities and Exchange Board of India (Sebi) issued draft guidelines on the setting up of real estate investment trusts (REITS).
Shares of DLF and Unitech surged 3.21% and 8.10%, respectively. During the week, realty index gained the most at 8.7%.
It was a positive week, with benchmark indices recording gains in four out of five trading sessions. The BSE Sensex ended the week higher by 3.08%, or 613 points. On Wednesday, the 30-share index added 265 points as data showed that trade deficit narrowed to the lowest level in 30 months.
Experts feel that the rally in markets was unexpected. ?There was a built-up of short position. But after the rally, we are seeing significant short-covering taking place. Going ahead, the major trigger for markets will be the resolution of the US debt ceiling stand-off,? said Alex Mathews, head (research), Geojit BNP Paribas Financial Services.
Among peers, most of the Asian markets edged higher on Friday. The Shanghai Composite was the biggest gainer, up 1.70%. Nikkei climbed 1.48%, Hang Seng and Kospi were also up 1.16% and 1.17%, respectively. In European markets, DAX was up 0.23%, while CAC was trading marginally in the red territory at 6.00 pm India time. During the week, Jakarta Composite was the top performer as it gained more than 4%, while Shanghai Composite was 3.01% up.
Back home, 20 of the 30 Sensex stocks ended in the green on Friday. In the broader market, breadth was moderately strong with 1,335 stocks on the BSE ending higher compared with 1,131 declines. Seven of the 13 BSE sectoral indices ended higher. BSE Realty and BSE Capital Goods were up 2.66% and 2.77%, respectively.
