MUMBAI (Reuters) The BSE Sensex rose 2.1 percent on Friday, as upbeat earnings reports from key U.S. firms fuelled a Wall Street rally overnight and lifted sentiment across Asia. Private-sector lender ICICI Bank, outsourcer Infosys Technologies and top telecoms firm Bharti Airtel led the gains, putting the market on course for a weekly gain after it dropped 9.4 percent last week. "We are seeing overseas markets going up, while in India, first-quarter results have been good so far," said Amitabh Chakraborty, president of equities at Religare Securities.
"Fund flows coming into the market have been quite positive." Last week, the benchmark posted its biggest weekly fall in eight months, after the government's budget offered little in terms of bold economic and financial reforms, but set a huge deficit of 6.8 percent of GDP, the highest in 16 years. There are still concerns about rich valuations and uncertainty surrounding the domestic economy and corporate earnings growth, but the momentum in overseas markets is spurring the benchmark higher, traders said.
Equities worldwide have rallied this week as strong U.S. corporate earnings, and encouraging economic data from China and Singapore signalled the turmoil in the global economy was abating. But on Thursday, Indian shares retreated from gains of as much as 1.7 percent after a poor start for European peers sparked profit-booking on a 6.4 percent jump in the market over the previous two sessions. "One should not be too bullish about the market now," Chakraborty said. "It's time to be a little cautious." ICICI Bank rose 3.5 percent to 719.35 rupees, while No. 2 outsourcer Infosys climbed 3.1 percent to 1,850.50 rupees. Bharti, which is in exclusive merger talks with South Africa's MTN, advanced 4.9 percent to 824 rupees. In the broader market, gainers led losers by more than 2.5 to 1 on relatively light volume of 104.6 million shares. The 50-share NSE index was up 2 percent at 4,316. Asian shares were higher on Friday, with Japan's Nikkei up 0.5 percent, while MSCI's measure of other Asian markets rose 0.7 percent.
U.S. stocks rallied for a fourth day on Thursday after JPMorgan's strong results fed growing optimism about the quarterly earnings season and technology shares rose in anticipation of more good news.
MAIN TOP 3 BY VOLUME
* Satyam Computer on 8.5 million shares
* Ispat Industries on 3.7 million shares
* Anu's Labs on 3.6 million shares
STOCKS ON THE MOVE
* Opto Circuits India Ltd fell 2.9 percent to 165 rupees after the company posted a 6 percent fall in its April-June net profit from a year earlier.
* Exide Industries Ltd rose 8.6 percent to 76.70 rupees after the industrial and automotive battery maker posted a 49 percent rise in net profit in the June quarter.
* JK Tyre & Industries Ltd gained 12.1 percent to 91 rupees after the company's net profit doubled in April-June.
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