Indian shares climbed for a fifth consecutive session on Thursday, their longest winning run in five months, as investors picked bargains in a market that is still among the worst performers in emerging regions. Financials powered the main index up more than 1 percent after food inflation eased to a two-month low in early February on moderating prices of onions and other vegetables.
Analysts said the market was still not out of the woods, with foreign institutional investors (FIIs) turning net sellers this year following a spate of political corruption scandals and rising interest rates.
Reliance Communications fell as much as 2.8 percent after Anil Ambani, who controls the No 2 mobile carrier, was questioned on Wednesday by federal police in a widening corruption investigation that has battered the government. The stock recovered later and ended up 0.3 percent at 99.95 rupees. For a newsmaker on Anil Ambani, see J.P. Morgan on Wednesday slashed its target price on the stock by 49 percent to 82 rupees, citing lower estimates for wireless and broadband segments and issues related to spectrum regulations.
The 30-share BSE index rose 1.13 percent or 205.92 points to 18,506.82, its highest close in three weeks. Nineteen of its components closed in the green. The Nifty or NSE index closed up 1.2 percent at 5,546.45 points.
The benchmark has risen nearly 6 percent over five sessions, but is still down 9.7 percent in 2011, as foreign funds pulled out $1.7 billion. Foreign funds had bought a record $29.3 billion of stocks in 2010 and helped the BSE index rally 17.4 percent. The market breadth was positive almost through the day, with advancing shares outpacing declining ones in a ratio of 1.5:1.
Around 278 million shares changed hands on the BSE, lower than the 30-day average daily volume of 307 million shares.Top lender State Bank of India firmed nearly 1 percent, while rivals ICICI Bank an d HDFC Bank gained 0.5 percent and 4.2 percent respectively. Mahindra Satyam, which was earlier known as Satyam Computer Services, rose 1.5 percent after the software services firm agreed to pay $125 million to settle US shareholder litigation arising from an accounting fraud that in 2009 turned into India's biggest corporate scandal. Global stocks hit a 30-month high, driven by strong corporate earnings and cautious optimism on the US economic recovery from the Federal Reserve.