Indian shares rose for a third straight session on Thursday as lenders such as Kotak Mahindra Bank extended gains on upbeat sentiment as the central bank exempted long-term bonds for the infrastructure sector from reserve requirements. Also, overseas investors bought Indian shares worth of 6.21 billion rupees ($103.5 million) on Wednesday, provisional exchange data showed.
Sentiment also got a boost as the monsoon rains were 15 percent below average in the past week, against 41 percent below average rainfall in the previous week, the weather office data showed. Broader gains were although capped on caution ahead of key earnings such as from Tata Consultancy Services Ltd due later in the day and Reliance Industries Ltd on Saturday.
"Markets are likely to trade range-bound in the short term. Corporate earnings are the immediate trigger and there would be stock-specific movements. There could be some profit booking in select stocks, however, long-term trend is still bullish," said Suresh Parmar, head, institutional equities at KJMC Capital Markets. The broader NSE index rose 0.21 percent, or 16.05 points, to end at 7,640.45, marking its second straight highest close since July 7, when it hit a record closing high. The benchmark BSE index edged up 0.04 percent, or 11.44 points, to end at 25,561.16.
Kotak Mahindra Bank ended 3.4 percent higher, while State Bank of India Ltd rose 1 percent. The Reserve Bank of India said on Tuesday it will allow long-term bonds raised by banks for infrastructure lending to be exempted from mandatory reserve requirements, in line with the government's announcement in the federal budget last week. Kotak also gained after raising foreign institutional investment limit to 40 percent. Defensive stocks also rose on caution ahead of key earnings. In healthcare shares, Lupin Ltd gained 2.6 percent while Cipla Ltd rose 1.1 percent.
Glenmark Pharmaceuticals Ltd also rose 1.4 percent after the company said it plans to set up a new manufacturing facility in the United States. Strides Arcolab Ltd gained 1.9 percent after investor Shivanand Shankar Mankekar raised his stake in the company to 4.7 percent in the June quarter from 1.26 percent held earlier, according to exchange data.
Indian power equipment maker Crompton Greaves Ltd jumped 13.3 percent after proposing to demerge its consumer products business unit into a separate listed company, the company said in a statement on Thursday. However, IDFC Ltd fell 2.4 percent on profit-taking, after the Indian infrastructure lender rallied 8.8 percent in the previous session. Also hurting shares was a statement by the Reserve Bank of India late Wednesday that the company had agreed to cut its overseas investment limit.
Mahindra and Mahindra Ltd fell 3.1 percent after 11.8 million shares changed hands in twenty-four block deals on the BSE exchange on Thursday morning, according to Thomson Reuters data. Bajaj Auto Ltd fell 2.3 percent after India's second-largest motorcycle maker, reported a flat quarterly profit, lagging expectations, hurt by sluggish sales volumes in the domestic market. Tata Consultancy Services also fell 0.8 percent ahead of its April-June results due later in the day. Reliance Industries shares ended 0.7 percent lower ahead of its quarterly results on Saturday.
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