Sensex jumps to record on upbeat IMF report

Bloomberg/MumbaiIndia’s benchmark stock-index rallied to an all-time high, led by metal producers and banks, after the International Monetary Fund said the nation will be world’s fastest-growing major economy in the year through March 2017.Tata Steel had the biggest advance in three months, helping a gauge of metalmakers gain the most among 13 sector indexes complied by the BSE. Housing Development Finance Corp climbed to a record, while State Bank of India increased for the first time in three days. Oil & Natural Gas Corp, the largest explorer, headed for a fifth day of gains, the longest run since March.The S&P BSE Sensex jumped 1.9% to 28,784.67 at the close. While China’s growth is forecast to slow to 6.3% in 2016, the IMF estimates India’s growth accelerating to 6.5% in the fiscal year through March 2017. The Sensex has risen every day after the central bank cut interest rates for the first time in 20 months on January 15 as oil’s rout cooled consumer prices.“We are at the start of a multi-year cycle in India of higher growth, lower inflation and much higher equity prices,” Madhav Dhar, a Delhi-based managing partner at GTI Capital Group, an India-focused investment firm, said in an interview with Bloomberg TV India yesterday. “The world is getting more turbulent and complex, but India is about as well positioned as it can be as a major investment destination.”Tata Steel gained 4.5%, while Sesa Sterlite, the nation’s largest copper producer, jumped 5.7%, the most since June 5. Hindustan Zinc added 1% after the company’s third-quarter profit climbed 38% to Rs23.8bn ($386mn), beating the Rs21.7bn median estimate of analysts. Earnings were posted after markets closed on Monday.Housing Development Finance climbed 5.9% and was the biggest gainer on the 30-stock Sensex. State Bank of India advanced 1.6%, while Axis Bank, the Sensex’s biggest gainer in 2014, rallied 4.2% to an all-time high.Kotak Mahindra Bank yesterday reported third quarter net income rose 21% to Rs7.17bn. That missed the Rs7.6bn estimated by analysts. The shares rose 0.5%.Five out of six Sensex members that have so far announced results for the December quarter have beaten or matched analyst estimates. Profits at 67% of the 30 Sensex firms beat or matched estimates in the September quarter, versus 46% in the three months ended June and 60% in March, data compiled by Bloomberg show.Oil & Natural Gas added 0.8%. ITC, India’s biggest cigarette company, increased 3.4%.Foreigners have bought a net $156mn of Indian shares so far this year. The Sensex has gained 3.3% this month and trades at 15.8 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 10.6.Meanwhile, the Indian rupee yesterday gained 2 paise against the dollar at 61.69 with banks and exporters selling the US currency amid sustained capital inflows in view of strong equity markets, extending gains for the forth day in succession. The rupee resumed lower at 61.82 per dollar as against the Monday’s closing level of 61.71 per dollar at the Interbank Foreign Exchange (Forex) Market on initial dollar demand.