Indian shares closed 2.3 percent higher on Wednesday, snapping a five-day losing streak, on optimism around quarterly corporate earnings, with lenders leading the gains. State Bank of India and ICICI Bank rose 1.3 percent and 2.4 percent respectively, while HDFC Bank firmed 3.2 percent.
The banking sector index was up 2.3 percent. "Earnings are expected to be good. Banks especially are up on positive earnings expectations," K. K. Mital, head of portfolio management services at Globe Capital said. Traders said the market was on a consolidation mode after being beaten down for five straight sessions, with investor focus firmly on the guidance that outsourcers release along with their earnings.
Infosys Technologies, which gets more than 90 percent of its revenue from exports, rose as much as 2 percent ahead of its earnings on Friday. Bigger rival Tata Consultancy Services and No 3 outsourcer Wipro gained 2.7 percent each.
The top three outsourcers are expected to post strong quarterly profit and indicate robust revenue growth for the year ending March 2012 as overseas clients boost technology spending in an improving global economy. The 30-share Bombay Stock Exchange (BSE) index rose 2.3 percent or 434.32 points to 19,696.86, with 28 components closing in the green.The 50-share NSE index closed up 2.17 percent at 5,911.50 points.
The index rose 9.1 percent in March, its biggest monthly rise in six months, but is down 5 percent so far this year. Auto stocks, including Maruti Suzuki, Tata Motors and Mahindra and Mahindra rose between 2.4 and 3.3 percent. Shares of Hero Honda Motors rose nearly 6 percent after the company said its board has declared an interim dividend of 70 rupees ($1.6) per share.
State-run oil marketing companies such as Bharat Petroleum Corp, Hindustan Petroleum Corp and Indian Oil Corp rose between 2.3 percent and 4.3 percent. In the broader market, gainers were nearly double the number of losers, with about 380 million shares changing hands on the BSE. The market was closed on Tuesday and will be shut on Thursday for local holidays.