Technology firms, banks boost Indian equities

Bloomberg

Mumbai

Indian equities advanced, led by technology companies and banks, as the benchmark index posted its second weekly advance. Software exporter Tata Consultancy Services was the biggest gainer on the S&P BSE Sensex. State Bank of India, the largest lender by assets, rose to a two-week high. Cipla added 1.8%, sending a gauge of drugmakers to a record.

The Sensex increased 0.6% to 21,193.58, the highest close since December 10. US equities gained to an all-time high after data showed home sales held near a five-year high and orders for durable goods rose more than forecast, indicating growing momentum in the world’s largest economy. India’s top software makers, which get more than 90% of their sales from abroad, are among the top four performers on the Sensex in 2013 as an 11% decline in the rupee and economic revival in developed nations boosts the outlook for Indian exporters.

“Exporters rallied on speculation of a revival in export demand following improvement in the US economy,” Jagannadham Thunuguntla, chief strategist with SMC Global Securities, said by telephone from New Delhi. “Fewer bets are being placed because of the holiday season, which is reflected in lower volume and volatility.”

The 50-stock CNX Nifty Index rose 0.6% to 6,313.80. Volume on the measure was 44% below the 30-day average. The 50-day volatility on the Sensex was 15.5, near the lowest since May, data compiled by Bloomberg show. The India VIX, a gauge of options prices on the Nifty, fell 1.5%.

State Bank of India, the worst-performer on the index this year, rose 1%. ICICI Bank advanced 1% to the highest level since December 12. Housing Development Finance Corp added 1.2%, the most since December 20.

Infosys jumped 1.2% to a record. Bigger rival Tata Consultancy, which has rallied 72% this year and the most among all Sensex stocks, advanced 2.9%. Wipro, the third-biggest software exporter, added 1.2%.

Monsanto India jumped as much as 17% to the highest since September 2011 after an Economic Times report said the government may allow genetically modified food crops in the country. Bayer CropScience gained 1.3% to Rs1,705. The stock rose to a record Rs1,820 intraday. Cipla gained the most since December 17. Sun Pharmaceutical Industries  advanced 1.1%. The S&P BSE Health Care Index added 0.7% to a record-high.

Financial Technologies India declined 1% to a one-week low. The founder of the Multi Commodity Exchange of India was asked to cut its holding in the bourse after the regulator said it was unfit to own a controlling stake. MCX  slumped 4.4%, the most since November 12.

The Sensex has climbed 9.1% this year, advancing to a record on December 9, as global funds poured almost $20bn into local shares even amid elevated inflation and the slowest economic growth in more than a decade. The gauge is valued at 13.6 times projected 12-month earnings, with the five-year average multiple of 14.3.