MUMBAI: Indian markets pushed 1.8 percent higher on Wednesday, boosted by firm world equities and a normal monsoon forecast, but the companies named in a telecoms graft scandal plunged in huge volumes after a court rejected bail pleas of their executives.
A court rejected bail applications of five business executives from Reliance Anil Dhirubhai Ambani Group, the Indian joint ventures of Norway's Telenor and the UAE's Etisalat . The accused will go to jail over the sale of telecoms licences at below-market prices.
Unitech , DB Realty and Reliance Communications dropped between 1.5 percent and 5.5 percent.
"We want to keep away from these stocks. In my opinion, we are getting into a more robust compliance environment," said Rakesh Rawal, head of private wealth management at Anand Rathi.
Rawal said he does not hold these three stocks for his clients and would not consider buying them right now.
The 30-share BSE index gained 1.83 percent or 349.15 points to 19,470.98, with 27 components closing in the green.
"Until the earnings season gets over, the focus will be more on company-specific moves as and when results trickle in," said Rawal.
"The RBI (Reserve Bank of India) policy is the next big event to watch out for," he said, referring to the central bank's annual policy review on May 3.
Gainers were 2.8 times the number of losers on the National Stock Exchange (NSE), in a volume of 739 million, higher than the 90-day average volume of 654 million shares.
Foreign funds have invested nearly $3 billion in equities since the start of March, betting on the country's robust growth, driving the benchmark index 9.2 percent higher.
For the year to date, the index is still down 5.1 percent. The 50-share NSE index or Nifty gained 1.9 percent to 5,851.65 points.
Financials led the rally on expectations that Tuesday's forecast of normal monsoon rains this year will strengthen the prospects of farm output in a country that depends largely on the annual monsoon for irrigation.
Bumper crops usually put more money in the hands of rural India, where most of the people live, and boosts consumer spending on a wide range goods from automobiles to television sets. Higher farm output could also ease inflation pressures in Asia's third-largest economy.
Top lender State Bank of India firmed 2.3 percent, ahead of a press briefing scheduled after market hours, in which the bank said it will make a "significant announcement."
Leading private lenders ICICI Bank and HDFC Bank rose 1.9 percent and 1.4 percent respectively. HCL Technologies , the country's No. 4 software services firm, jumped as much as 10.4 percent to 526 rupees -- its highest in more than a decade -- after posting a better-than-expected 33 percent rise in March quarter net profit.
