Indian shares rose for the second week in August as they closed half a percent higher on Friday, lifted by firm Asian stocks and led by gains in top lender State Bank of India, which recorded a fresh all-time high. Traders said the outlook for the market was bullish. A drop in European shares capped the gains.
SBI rose as much as 3.4 percent to 2,879.95 rupees, its highest level ever, as investors gave a thumbs up to its June quarter earnings which beat market estimates. The 30-share BSE index rose 0.52 percent or 93.13 points to 18,167.03 points, taking gains in the week to 0.1 percent. Two-thirds of its components advanced.
"Market will be rangebound until we have fresh triggers to drive it up, now that earnings season nears close," said Nitin Rakesh, CEO of Motilal Oswal's asset management business. The benchmark index is up 1.7 percent so far in August, and has risen 4 percent in 2010, with foreign funds pumping in $11.3 billion in Indian equities.
Oil explorer Cairn India rose as much as 5.1 percent to an all-time high of 358 rupees, as a source told Reuters that India-focused Vedanta Resources will take a 51 percent stake in the Indian firm for $8 billion to $8.5 billion in a deal that is likely to be announced by Monday. Sterlite Industries, an unit of Vedanta, dropped 4.3 percent.
"This is a knee-jerk reaction. Sterlite has huge cash balances which the group may use to fund Cairn India stake buy," said Deven Choksey, managing director and CEO of KR Choksey Shares. Tata Steel erased some early gains and closed 1.4 percent higher.
Advancing shares thrashed declining ones in the ratio of 1.1:1 while 469 million shares changed hands on the BSE. SBI closed 2.4 percent higher at 2,849.40 rupees. Leading private lenders ICICI Bank and HDFC Bank firmed 1.2 percent and 0.6 percent respectively. Mortgage lender Housing Development Finance Corp rose 0.2 percent. The 50-share NSE index rose 0.7 percent to 5,452.10.
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