July 19 (Bloomberg) -- Indian stocks climbed, with the benchmark index holding at a seven-week high, as a drop in lenders countered a rally in software exporters.
The S&P BSE Sensex added 0.1 percent to 20,149.85 at the close in Mumbai, completing a fourth week of gains. Volume was 24 percent higher than the 30-day average. Tata Consultancy Services Ltd. rose to a record, leading its peers higher, on profit that exceeded estimates. ICICI Bank Ltd. declined to a 10-month low, pacing losses among lenders.
India’s S&P BSE Infotech index of 10 software makers is trading at levels last seen during the 2000 dot-com bubble as an economic recovery in the U.S. and a weakening rupee boost earnings prospects. A gauge of lenders sank 6.2 percent this week, the most since the period ended December 2011, after the central bank’s decision on July 15 to raise two interest rates to steady the rupee sparked a selloff in bank shares.
“Strong earnings from technology companies is supporting the markets and banks are getting hammered on fears the RBI may raise rates further to support the rupee,” R.K. Gupta, who helps oversee about $743 million as managing director at Taurus Asset Management Co., said by phone from New Delhi. “Investors will watch out for Reliance’s earnings for further direction.”
Reliance Industries Ltd., the owner of the world’s largest refining complex, added 0.7 percent to 923.7 rupees. First-quarter net income was 53.5 billion rupees, beating the 52.5 billion-rupees median of 32 analysts’ estimates compiled by Bloomberg. Earnings were announced after markets closed. The stock has the second-highest weighting in the Sensex.
Tata Consultancy, Asia’s largest software maker by market value, surged 5 percent to 1,742.8 rupees, the highest price since its trading debut in August 2004. Net income climbed 16 percent to 38 billion rupees in the June quarter from a year earlier, beating the 37.5 billion-rupee median of 40 analysts’ estimates compiled by Bloomberg.
The company joined smaller rival Infosys Ltd. in signaling demand for outsourced software work is rising in North America, the largest market for both companies that have a combined 14 percent weighting in the Sensex. Infosys, whose sales forecast in dollar terms exceeded analysts estimates, gained 1.7 percent to 2,847.45 rupees. The infotech index advanced 2.8 percent to 7,097.29, the highest close since March 2000.
Only one out of the six Sensex members that have reported earnings so far have trailed analysts estimates for the three months ended June. That compares with 27 percent companies that missed forecasts for the March quarter and 43 percent in the three months through December, data compiled by Bloomberg show.
ICICI Bank lost 2.6 percent to 959.30 rupees, the lowest close since September 2012. Rival HDFC Bank Ltd. decreased 0.6 percent to 680 rupees. State Bank of India, the biggest lender by assets, lost 0.7 percent to 1,811.3 rupees. The S&P BSE Bankex fell 1.8 percent to 12,543.48.
Housing Development Finance Corp. tumbled 3.1 percent to 803.2 rupees, the lowest price in three months.
Tata Motors Ltd., the owner of Jaguar & Land Rover, paced gains among automakers, gaining 2.7 percent to 294.65 rupees.
Hindustan Unilever Ltd., the biggest home-products maker, has surged 14 percent this week, the most since the period ended May 3. The stock fell 0.3 percent to 686.1 rupees today.
Global investors sold $19 million of local shares on July 18, paring this year’s inflows to $12.35 billion, data compiled by Bloomberg show. Overseas funds have sold a net $982 million of Indian stocks this month, the most among 10 Asian markets tracked by Bloomberg, extending June’s $1.8 billion sell-off.
The Sensex trades at 14 times projected 12-month earnings, the most expensive since Oct. 9. That compares with the MSCI Emerging Markets Index’s 10 times. The Sensex has risen 3.7 percent this year.
The CNX Nifty index on the National Stock Exchange fell 0.2 percent to 6,029.20. India VIX, which gauges the cost of protection against losses in the Nifty, fell 0.8 percent.
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