Reuters
Mumbai
Indian shares edged higher yesterday, marking their fourth consecutive quarterly gain as blue-chips rose on hopes upcoming earnings and auto sales will show the economy remains on the mend, while the central bank’s decision to keep rates unchanged had little impact.
The NSE index rose just 0.07% for September, enough to mark its fifth consecutive month of gains, but still ended up 4.64% for the July-September quarter on continued hopes that Prime Minister Narendra Modi would spark a revival in the economy and in domestic investments.
Meanwhile, the BSE index fell 0.03% for the month, breaking seven months of consecutive gains, but advanced 4.8% for the quarter.
Gains have also been driven by the Reserve Bank of India’s strong commitment to curb inflation, although traders say an excessive focus on curbing consumer prices could imperil economic growth.
The RBI yesterday kept interest rates unchanged as widely expected and said it would refrain from cutting interest rates until it was confident that consumer inflation can be reduced to a target of 6% by January 2016.
“The RBI policy uncertainty is over. The market is now looking forward to earning reports. We expect July-September earnings to grow by 15% compared with 7% in the previous year,” said Nirakar Pradhan, chief investment officer at Future Generali India Life Insurance.
The benchmark BSE index rose 0.13%, or 33.40 points, to end at 26,630.51. The broader NSE index edged up 0.07%, or 5.90 points, to end at 7,964.80. Pharmaceutical exporters led the gainers for the month and the quarter. Cipla rose 21.9% in September and 43.5% for the July-September quarter. Lupin rose 8.6% for the month .
Blue-chip stocks led the gainers yesterday. Housing Development Finance Corp rose 2.3%, while ITC ended up 1.1%.
Reliance Industries rose 1.3% and Sun Pharmaceutical Industries ended up 2.6%. Auto stocks rose ahead of monthly sales figures. Maruti Suzuki India ended 1.8% higher and Bajaj Auto rose 2%.
Housing Development & Infrastructure gained 1.9% after the company said on Monday its promoters revoked all shares earlier pledged with IL&FS Trust Co
Business process outsourcing company HOV Services surged 6%, adding to Monday’s 20% jump after the company said on Monday SourceHOV Holdings, in which it holds a minority stake, will merge with BancTec Group.
However among stocks that fell, metal shares declined on weak China factory output data. Tata Steel ended down 1.6% while Hindalco Industries lost 1.9%.
Meanwhile the rupee fell yesterday, posting its worst month since the record low levels of August 2013, as the dollar continued to strengthen against emerging market currencies over growing bets for an early hike in US interest rates.
The rupee fell around 2.1% in September, the most since a fall of 8.8% in August last year, when the currency was in the midst of the worst market turmoil since the balance of payment crisis of 1991.
Gains earlier in the year have stalled, with the rupee falling around 2.64% in the July-September quarter, around growing worries that improving US economic data would allow the Federal Reserve to start raising interest rates.
The partially convertible rupee ended at 61.7450/61.7550 per dollar compared with Monday’s close of 61.53/54.
The rupee hit an intra-day low of 61.83, a level last seen on March 5 after the euro fell below 1.26 against the dollar. The weakening rupee comes as the dollar gained more than 7% against a basket of major currencies over the past three months and was poised to finish the month with its best quarterly gain in six years.
