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Indian stocks gained for a second day amid optimism the government would succeed in pushing its plan to allow foreign investment in the country’s retailing industry in a vote later yesterday.
Later in the day, the country’s minority government survived a vote in parliament on the contentious move to allow in foreign supermarket chains, delivering a major boost to its pro-market reform agenda.
The vote saw the motion defeated by a margin of 35, handing the Congress-led government a victory of 253 votes against 218 in its first major test since it lost its majority in September.
The BSE India Sensitive Index, or Sensex, rose 0.2% to 19,391.86 at the close, holding at a 19-month high. Volumes in the measure exceeded the 30-day average by 25%, data compiled by Bloombeg show. Sterlite Industries (India), the largest copper producer, rallied 5.3% as the metal jumped to more than a six-week high in London. Tata Steel climbed 2.1%. Pantaloon Retail India, the largest supermarket operator that’s not part of the Sensex, climbed to the highest close in more than a year.
Offshore funds were net buyers of local shares for a 14th day on Tuesday, taking net purchases this year to $20.4bn, the most among 10 Asian markets tracked by Bloomberg, excluding China, data compiled by Bloomberg show.
Sterlite rallied 5.3% to Rs112.85, its highest close since August 21. Tata Steel, India’s biggest producer of the metal, added 2.1% to Rs398.20, its highest level in almost a month. Aluminum producer Hindalco Industries climbed 3.5% to Rs121.15.
Tata Motors, the owner of British luxury car brands Jaguar and Land Rover, rose 1.3% to Rs274.95. The company plans to set up joint ventures with South Korean firms, Financial Chronicle reported, citing an official.
Infosys, India’s second-largest software exporter, slumped 2.3% to Rs2,382.50, the most since October 12. The stock will be replaced by Facebook on the Nasdaq-100 Index next week, Nasdaq OMX Group said.
Pantaloon jumped 3.3% to Rs237.65, the highest close since September 22 last year. Shoppers Stop surged 7.5% to Rs464.70, the highest since July 25, 2011, and Trent, part of the Tata group, rallied 4.8% to a record Rs1,274.35.
Thirty-day volatility in the Sensex was at 10.92, compared with the year’s lowest reading of 9.06 set on November 26. The gauge is trading at 15.8 times estimated earnings, the highest level since February, compared with the MSCI Emerging Markets Index’s 11.8 times.
The S&P CNX Nifty Index on the National Stock Exchange of India added 0.2% to 5,900.5 while its December futures traded at 5,948. The BSE-200 Index gained 0.3% to 2,407.71. India VIX, which measures the cost of protection against declines in the Nifty, jumped 4.5% to 16.62, its highest level since November 19.
Meanwhile, India’s rupee advanced 0.2% to 54.5575 per dollar in Mumbai. One-month implied volatility, a measure of expected moves in exchange- rates used to price options, was unchanged at 10%.
Three-month onshore rupee forwards traded at 55.49 per dollar, compared with 55.51 on Tuesday. Offshore non-deliverable contracts were at 55.30 versus 55.44.
