Indian stocks climbed, with the benchmark index capping a second weekly gain, as energy companies and property developers increased after the government accelerated measures aimed at attracting investments and bolstering economic growth.
Cairn India climbed to a four-month high after the government freed prices of natural gas extracted from deep sea fields that start production this year. DB Realty was the top performer on a gauge of realty companies after the upper house of parliament passed a bill to set up an industry regulator. Adani Ports & Special Economic Zone rallied the most in a week, while Lupin, a drugmaker, climbed to a one- month high.
The S&P BSE Sensex added 0.4% or 95 points to 24,717.99 at the close in Mumbai. Lawmakers on Thursday passed the real estate bill and eased rules for mining companies, stoking optimism that Prime Minister Narendra Modi’s Bharatiya Janata Party may succeed in garnering support for crucial bills on a national sales tax and a new bankruptcy code that have been blocked by opposition parties in parliament.
“There’s been consistent effort to streamline policies and yesterday’s measures by the cabinet and the bills cleared in parliament are incremental steps in the right direction,” Vaibhav Sanghavi, managing director at Mumbai-based Ambit Investment Advisors, said in an interview. His fund is bullish on consumer-discretionary companies such as makers of cars and paints, and private banks.
The cabinet approved an amendment to its mining laws that will allow companies to more freely sell assets, as part of Modi’s effort to improve ease of doing business in Asia’s third- largest economy. The proposal now needs parliament’s approval to become law.
The Sensex has risen in seven out of eight days after Finance Minister Arun Jaitley in his Feb. 29 budget pledged to further cut the fiscal deficit, stoking speculation of an interest-rate cut by the central bank. The budget proposals, which include a boost in spending on public and rural welfare projects, have spurred capital inflows. Foreign funds have bought $1.4bn of local shares this month, paring this year’s outflows to $1.5bn.
Asian and European stocks climbed as investors assessed the European Central Bank’s fresh stimulus measures announced Thursday. European shares jumped and tumbled on Thursday as ECB President Mario Draghi delivered interest-rate cuts, more bond purchases and a potential subsidy to lenders and then said the central bank is done with lowering borrowing costs for now. The Stoxx Europe 600 Index soared 2.2% yesterday.
Cairn India jumped 4.5%, while Hindustan Petroleum Corp and Bharat Petroleum Corp rose 1.2% each. DB Realty surged 3.5%. Rival Phoenix Mills gained 0.8% to take this week’s surge to 19%. Unitech rallied 13.5% this week.
The Sensex has fallen 5.4% this year and trades at 15.1 times its projected 12-month earnings compared with 11.6 times for the MSCI Emerging Markets Index.
Meanwhile the rupee closed little changed against the dollar yesterday. The currency closed at 67.05, up 0.02% from its previous close of 67.07. The local currency had opened at 67.16 a dollar and touched a high and a low of 66.94 and 67.24, respectively in intraday trade.
Since January, the rupee has lost 1.34% while foreign institutional investors sold $1.63bn in equities and $1.25bn in debt.
Most Asian currencies closed higher. South Korean won was up 0.87%, Singapore dollar 0.37%, Taiwan dollar 0.35%, Thai baht 0.27%, Malaysian ringgit 0.21%, China offshore 0.15%, and China renminbi 0.13%. However, Japanese yen was down 0.52%, and Indonesian rupiah declined 0.18%.
The yield on India’s 10-year benchmark bond closed at 7.627% against Thursday’s close of 7.636%. Bond yields and prices move in opposite directions.