Indian Stock Market Rallies as Banks Report In-Line Earnings and European Shares Recover

Strategic Insights -

India's benchmark stock index, the Sensex, rose 0.8% to 18,653.87 at the close in Mumbai, led by gains in lenders after a major bank reported quarterly earnings in line with analyst estimates. The rally was also fueled by a rebound in European shares, which eased investor concern. Banks such as HDFC Bank, State Bank of India, and ICICI Bank saw significant gains, with HDFC Bank paring losses of as much as 1.3% after its earnings report.

Key Takeaways:

  • The Sensex rose 0.8% to 18,653.87 at the close in Mumbai, driven by gains in lenders and a rally in European shares.
  • HDFC Bank pared losses of as much as 1.3% after its earnings report, while State Bank of India and ICICI Bank added 1.5% and 1.4%, respectively.
  • Tata Consultancy Services (TCS) rose 1.3% after IBM's earnings beat forecast, solidifying global growth in information technology spending and boding well for Indian software exporters.
  • The S&P CNX Nifty Index on the National Stock Exchange of India added 0.8% to 5,613.55, with July futures at 5,619.
  • Bank earnings were in line with estimates, with HDFC Bank reporting profit of Rs10.8 billion ($242 million) in the June quarter, compared with Rs10.7 billion estimated by 24 analysts in a Bloomberg survey.
  • Deven Choksey, managing director of K.R. Choksey Shares & Securities, noted that strong earnings from banks show their growth momentum hasn't been affected during a high interest rate environment.

Statistics:

  • The Sensex rose 0.8% to 18,653.87 at the close in Mumbai.
  • HDFC Bank pared losses of as much as 1.3% after its earnings report.
  • State Bank of India added 1.5% to Rs2,512.7 and ICICI Bank climbed 1.4% to Rs1,061.8.
  • Tata Consultancy Services (TCS) increased 1.3% to Rs1,140.1.
  • Infosys, the second-largest software maker, increased 1.4% to Rs2,750.5, paring a seven-day slide.

Sources:

  • Bloomberg (24 analysts)
  • Syndigate.info (Albawaba.com) - Muscat Press and Publishing House SAOC 2011