Bloomberg
Indian stocks rose to a record, erasing an intraday loss, after data showed the trade deficit narrowed last month, adding to signs the economy is improving.
State Bank of India surged to a four-year high as concerns on the asset quality of the nation’s biggest lender eased. Tata Motors surged to an all-time high after saying Jaguar Land Rover plans to start a plant in China by the year-end. Reliance Industries, owner of the world’s largest refining complex, advance for the first time in
four days.
The S&P BSE Sensex rose 0.5 to a record 28,177.88 at the close. The gauge erased a loss of as much as 0.5% after the government reported the trade gap in October narrowed to $13.4bn from $14.25bn in September. Data last week showed consumer-price gains last month were the least since early 2012, while factory output rose at the fastest pace in three months. The economy may grow at 7 to 8% in two years, Jayant Sinha, the junior finance minister, said on November 10.
“India is going back into the high-growth, low inflation environment,” Adrian Mowat, the chief Asia and emerging market equity strategist at JPMorgan Chase & Co, said in a Bloomberg Television TV India interview yesterday. “We remain confident with the fundamental story.”
State Bank soared 5.5%, the best performance on the Sensex. The stock’s price target has been raised by at least 12 brokerages including Goldman Sachs Group after the bank’s second-quarter results on November 14. Gross bad-loan ratio was at 4.9% on September 30, little changed from previous quarter.
Tata Motors jumped 4.1%, the most since September 22. Two-wheeler maker Hero MotoCorp added 2.2% to its highest level since October 31. Reliance rose 1.7%, ending a three-day drop. NTPC, India’s biggest power producer, advanced 2%.
Logistics company Gati Corp surged 18.5%, taking its six-day gains to 57%. Allcargo Logistics jumped 13%. Gateway Distriparks Ltd increased 7.7% to a record. Snowman Logistics rallied 15% to Rs123.70. The company, 40% owned by Gateway Distriparks, sold shares at Rs47 apiece in September.
Investors are buying logistics stocks amid expectations that sales will be boosted on “pick up” in trade and recovery in the economy, Viral Shah, an analyst at SBICap Securities, said by phone yesterday. Profits at 67% of the 30 Sensex companies exceeded or matched analyst estimates in the September quarter, versus 46% in the three months ended June and 60% in March, data compiled by Bloomberg show.
Rupee falls on global worries
The Indian rupee fell for a third consecutive session yesterday, trading near its lowest in a month, after data showing Japan slipping into recession sparked worries about global growth even though recent foreign inflows to India have been strong.
Concerns about global growth were reinforced after data yesterday showed India’s exports in October fell 5% from a year earlier, even as the trade deficit narrowed from September.
The dollar’s recent strength has pushed the rupee down 0.6% so far this month at a time when the benchmark 10-year bond yields have hit 15-month lows and domestic stock indexes have hit record highs.
Traders say the rupee could remain under pressure given that analysts expect the dollar to continue to gain, even as foreign investors have bought a net $2.54bn in shares and debt so far this month.
“The weakening trend should continue for some time. The pair may touch 61.90/95 before it stages a comeback,” said Navin Raghuvanshi, a forex dealer at DCB Bank.
The partially convertible rupee closed at 61.73/74 per dollar versus its previous close of 61.72/73. The rupee had hit its lowest level in nearly a month on Friday.
