Sensex up for 7th quarter; best month since May '09

Surging foreign portfolio investment lifted the indices higher for the seventh quarter in a row, its longest winning run in at least 20 years. But mounting concerns the rally was overdone took some sheen off the attractive long-term story.

The Sensex gained 13.4 per cent in the quarter and notched a 11.7 percent gain in September, its best monthly gain in 16 months.

Foreign funds have poured in $5.3 billion in Indian shares this month, including primary market offerings. Even as there is one more quarter to go, their net investment so far in 2010 currently stands at $18.2 billion, which has helped the benchmark index rise 14.9 per cent from a year earlier.

The 30-share BSE index climbed 0.57 per cent, or 112.78 points, to 20,069.12, in a choppy session on expiry of monthly derivatives contracts on the National Stock Exchange.

Nineteen of its components closed in the green.

Mahindra Satyam nosedived 9.5 per cent to rs 90.10 after the outsourcer reported a net loss for financial years 2009 and 2010, giving the first view of its financials nearly two years after it was hit by India’s biggest corporate fraud.

JPMorgan downgraded the stock to "neutral" from "overweight" as the restated financials restored normalcy, but the progress was likely to be slow.

Financials led the charge and rose on expectations loan demand will grow in the fast-expanding economy.

State Bank of India rose 1.2 per cent, while private lenders ICICI Bank and HDFC Bank climbed 0.8 per cent and 1.5 per cent, respectively.

Maruti Suzuki gained 0.7 per cent after its chairman said the company expected September vehicle sales to rise 32-33 per cent from the same period a year earlier.

Reliance Industries shed 1.3 per cent, as there were no near-term positive triggers to boost the stock, dealers said. The stock, which has the highest weight on the Sensex, is down 9.5 per cent so far in 2010.

In the broader market, losers outnumbered gainers in a ratio of 1.3:1 on a moderate volume of 479 million shares.

The 50-share NSE index firmed 0.7 per cent to 6,029.95.

By 1023 GMT, European shares and the MSCI’s measure of Asian markets other than Japan shed 0.1 per cent each.