Sensex edges higher; Tech Mahindra, Tata Group gain

By Arnab Paul

REUTERS - Indian shares edged higher on Friday boosted by a recovery in Tata Group companies such as Tata Motors, while software maker Tech Mahindra Ltd jumped after reporting a surge in quarterly revenue.

However, the NSE and BSE indexes were set to shed 0.5-0.6 percent for the week.

The Sensex was up 0.1 percent at 27,946.66 as of 0642 GMT, while the Nifty traded 0.3 percent higher at 8,640, on track for its first gain in four sessions.

Tech Mahindra was the top percentage gainer on the NSE index, rising as much as 7.2 percent, after reporting the biggest revenue growth among its peers in the September quarter.

Recovery in Tata Group stocks also helped indexes erase some of their losses in the previous sessions.

Tata Motors rose 2.4 percent, contributing almost one-fourth of NSE's gains. Tata Power and Tata Steel rose more than 1 percent.

However, trading was subdued ahead of a holiday next week. Indian markets will open on Sunday for a special one-hour trading session on account of Diwali, a Hindu religious holiday, and will remain closed on Monday.

Analysts said trading is expected to be muted over the next few weeks as global investors await the outcome of the U.S. presidential elections, which could also keep domestic flows in check.

"One of the biggest factors to affect domestic markets would be foreign investments," said Vinod Nair, head of research at Geojit BNP Paribas Financial Securities.

"We have already seen the numbers dwindle this week and I do not expect the numbers to pick up in the following couple of weeks. This, along with muted earnings expectations is likely to subdue growth," he said.

Foreign investors have sold a net $450.25 million worth of local shares so far this month, paring year-to-date inflows to $7.06 billion.

Private sector lender Axis Bank, up 1.3 percent, was among the top gainers on the Nifty Bank index following two straight sessions of losses after a profit slump.

(Reporting by Arnab Paul in Bengaluru; Editing by Amrutha Gayathri)