Bloomberg/Mumbai
India’s stocks rose for the first time in four days, led by Dr Reddy’s Laboratories and ITC after earnings beat estimates. Reliance Industries Ltd fell as a partner said it will abandon an exploration project.
Dr Reddy’s, the third-biggest drugmaker by market value, advanced the most in a month, while ITC, the nation’s largest tobacco company, climbed to a record. Reliance, the nation’s most valuable company, sank to a six-week low as its UK-based partner announced it will abandon a well off India’s east coast that showed “poor” reservoir sands.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, added 21.07, or 0.1%, to 16,810.81. The advance pared this week’s decline to 3%, the biggest drop in almost three months. The S&P CNX Nifty Index on the National Stock Exchange rose 0.2% to 4,997.05. The BSE 200 Index increased 0.3% to 2,089.52.
“All indicators are in favour of Indian equities,” said Apurva Shah, head of research at Prabhudas Liladher Pvt in Mumbai, who has a 12-month target of 19,000 for the Sensex. “The dollar continues to slide, which is sending more liquidity to emerging markets like India and even earnings are turning out to be alright.”
The rupee strengthened, paring its first weekly decline in almost two months, on optimism rising company earnings and stock gains will attract investment from abroad.
The currency has gained 4.9% this year as overseas investors bought about $14.1bn more of the nation’s shares than they sold.
“The fundamentals are in place for the rupee to appreciate further in the coming months,” analysts at Barclays Capital including David Forrester wrote in a note to clients yesterday. “Balance of payments dynamics continue to be supportive as equity markets continue to perform well, attracting foreign inflows.”
The rupee advanced 0.5% to 46.52 per dollar at 5.30pm in Mumbai, according to data compiled by Bloomberg. That trimmed the currency’s loss this week to 0.5%.
Investors should buy the Indian currency against the dollar using one-month non-deliverable forwards to profit from further appreciation, Barclays advised. |
