Markets extend gains in late trades; Sensex tops 26,000

Markets firmed up in late trades and the Sensex topped 26,000 led by telecom shares and RIL

Markets extended gains in late trades with the Sensex topping the 26,000 level on renewed buying interest in IT majors and HDFC Group shares.

At 3:13PM, the 30-share Sensex was up 300 points at 26,014 and the 50-share Nifty was up 81 points at 7,766.

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Update at 2:15PM

Markets came off their day's highs but continued to trade firm and were seen heading for sixth straight day of gains led by a rally in telecom shares and Reliance Industries. Further, buying by foreign institutional investors also boosted market sentiment.

At 2:15PM, the 30-share Sensex was up 227 points at 25,943 after hitting an intra-day high of 25,988 and the 50-share Nifty was up 62 points at 7,746 after touching 7,756.

Foreign Institutional Investors remained buyers for the fourth straight session till Monday with net equity purchases of Rs 3,270 crore, according to stock exchange data.

The Indian rupee was trading higher at Rs 60.18 against the previous close of Rs 60.30 tracking weakness in the US dollar against Asian currencies while inflows by foreign funds in equities also boosted sentiment.

Asian markets ended higher shrugging off geopolitical tensions in Middle East and Ukraine. Shares in Japan ended higher after an extended weekend. The benchmark Nikkei ended up 0.8%. Hang Seng was the top gainer in the region up 1.7% and Shanghai Composite ended up 1% while Straits Times ended marginally higher by 0.1%.

European markets were also trading with gains in early trades on easing tensions as pro-Russian rebels have reportedly handed over the black boxes of Malaysia Airlines flight MH17 that crashed in Ukraine last Thursday to Malaysian authorities. CAC-40, DAX and FTSE were up 0.5-0.6% each.

Shares of telecom services providers such as Bharti Airtel, Idea Cellular and Reliance Communications (RCom) are trading higher by up to 5% after the telecom regulator authority of India (TRAI) recommended allowing sharing of all categories of airwaves held by operators, the move could help companies to reduce cost of mobile services.

"We believe Bharti Airtel, Vodafone and Idea are well positioned to benefit from spectrum sharing, starting with 3G spectrum sharing initially," Geojit BNP Paribas said in an update on the telecom sector.

Bharti Airtel was up nearly 5% and RCom gained 3%.

India’s third largest telecom operator by subscriber base, Idea was up nearly 5% after it reported a 57 per cent jump in profit after tax at Rs 728 crore in the quarter ended June, beating analysts’ estimates. The company’s profit increased on the back of higher call rates and a 11.5 per cent growth in data usage. In June 2013, Idea had reported profit after tax of Rs 462.7 crore. Analysts had expected the Aditya Birla Group company, which is partly owned by Malaysia’s Axiata, to report profit of Rs 600-650 crore for the April-June quarter.

Reliance Industries was trading higher by 3%, extending its Monday’s 2% gain, after reporting a better-than-expected 14% year on year jump in net profit at Rs 5,957 crore for the quarter ended June 30, 2014 (Q1). Analysts, on an average, had expected profit of Rs 5,462 crore for the quarter

HDFC Group shares were also among the top Sensex gainers. HDFC, the country’s largest mortgage financier, was up 2.3% after it reported a 15 per cent growth in net profit to Rs 1,345 crore for the quarter ended June, as compared to Rs 1,173 crore during the same period of the previous year, on the back of 17 per cent net loan growth to individuals.

HDFC Bank which had witnessed a correction post its results on Monday was trading 1% higher. On Monday, the private banking major said its net profit for the quarter ended June stood at Rs 2,233 crore, an annual rise of 21 per cent, the least in a decade. This was the fourth consecutive quarter when the annual rise in HDFC Bank’s quarterly profit after tax was below 30 per cent.

Sun Pharma was up 0.6%. The pharma major, which has been awaiting various regulatory approvals for its $4-billion merger deal with Ranbaxy, has received clearance from the Bombay Stock Exchange and National Stock Exchange.

Other Sensex gainers include, ITC, TCS and Tata Motors.

Among other shares, Thermax dropped 6% to Rs 890 on the BSE after the company's net profit fell 18% to Rs 41 crore on 3% decline in operating revenue to Rs 839 crore in Q1 June 2014 over corresponding period last year.

In the broader market, the BSE Mid-cap index was down 0.1% and the Small-cap index was trading flat with negative bias.

Market breadth turned negative with 1,459 losers and 1,364 gainers on the BSE.