Indian shares gained 0.8 percent on Thursday to their highest close in nearly 2-1/2 years, tracking European markets which reversed early losses as banks in the continent gained ahead of their stress test results. Investor focus remains on the results of the European banks' financial strength due on Friday. Cigarette-to-hotel business ITC topped the gains and climbed 1.6 percent to 297.60 rupees, after it said its June quarter net profit rose 22 percent.
Top lender State Bank of India gained 1.8 percent while leading private-sector lenders ICICI Bank and HDFC Bank climbed 0.7 percent and 1.1 percent respectively. The 30-share BSE index closed 0.76 percent or 135.92 points higher at 18,113.15, its best close since February 2008. Twenty-five of its components advanced.
In the broader market, gainers outpaced declining shares in the ratio of 1.1:1 in a relatively lower volume of 374 million shares. So far in 2010, foreign funds have invested a net of $8.8 billion in Indian shares, driving the benchmark up 3.7 percent. The 50-share NSE index, or Nifty, rose 0.8 percent to 5,441.95 points.
For the month to date, the BSE index rose 2.3 percent but it has underperformed MSCI's index of Asia ex-Japan shares and emerging markets index which have climbed 4.2 percent and 6.1 percent respectively. Mobile operator Idea Cellular rose 1.1 percent ahead of its earnings announcement. After the session ended, Idea said its June-quarter net profit dipped 32 percent. Third-largest software exporter Wipro closed 0.1 percent ahead of its quarterly earnings expected before market hours on Friday.
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