Indian stocks climbed in volatile trading, led by lenders and industrials, as an advance in crude oil to a seven-month high lifted global equities.
Axis Bank and ICICI Bank, the nation’s biggest non-state banks, were among the best performers on the S&P BSE Sensex. Housing Development Finance Corp (HDFC), the largest mortgage lender, gained for a second day. Oil and Natural Gas Corp (ONGC), the top explorer, rose the most in three months, while GAIL India, a natural-gas supplier, ended two days of declines. Sun TV Network jumped the most in more than nine months.
The Sensex increased 0.47%, or 120.38 points, to 25,773.61 at the close in Mumbai, paring an intraday advance of 1.1%. The Stoxx Europe 600 Index was set for its third day of gains, even after oil pared a climb that earlier pushed it above $48 a barrel. The pickup in commodity prices is helping a recovery in global equities, after weaker economic data wiped out almost $2tn of value in the first two weeks of May.
“Rising crude prices are giving some comfort on the global front,” Kaushik Dani, a fund manager at Karvy Stock Broking in Mumbai, said by phone. “On the domestic front, corporate earnings are being rolled over to the next fiscal year. That is giving support to the markets.” He is bullish on automakers and lenders.
The Sensex completed its best week in a month on Friday amid optimism that company earnings are recovering after the worst run since the global financial crisis.
Eight out of 15 index companies that have posted March quarter results so far exceeded or matched estimates. Investors have also been bullish after this year’s prediction for above-normal rainfall after back-to-back deficits and the passage of key economic bills in Parliament.
Foreign investors have bought $201mn of Indian stocks so far this month, taking this year’s inflows to $2bn.
The NSE Nifty 50 Index gained 0.4%, or 30 points, to 7,890.75 at the close, after rising as much as 1% to 7,940.1. “The 7,900 on the Nifty is a big resistance and that’s why we are seeing volatility and consolidation around that level,” Purvesh Shelatkar, senior vice-president and head of equities at BOB Capital Markets in Mumbai, said by phone.
“The market momentum is positive as global factors are supportive and locally, the monsoon is more or less on track, company earnings have been better than estimated” and the exit poll results show the ruling Bharatiya Janata Party (BJP) party winning elections in the northeastern Assam state, he said. “We are advising clients to buy at every dip.”
Axis Bank surged 3.5% to its highest level since October 27, while HDFC rose 2.7%. Oil and Natural Gas jumped 3.8%, the steepest climb since February 18 and GAIL climbed 1.7%.
Sun TV soared 10%, the most since August 3, with volume about 12 times the stock’s three-month daily average. The shares jumped on “sentimental impact” after exit polls showed the Dravida Munnetra Kazhagam returning to power in Tamil Nadu state, according to Kishor Ostwal, managing director at CNI Research.
Election results are due for five states tomorrow.
Motherson Sumi Systems, an autoparts maker, rallied the most since November 6, after its fourth-quarter profit climbed 22% to Rs414 crore, beating the estimated Rs353 crore. Mahindra and Mahindra, a tractor maker, added 2%, while Maruti Suzuki India increased 1.8%.
Tata Metaliks soared 20%, the most since September 2012, after it withdrew a scheme of amalgamation of Tata Metaliks and Tata Metaliks DI Pipes with Tata Steel. Tata Sponge Iron rallied 12%.
Meanwhile the rupee yesterday gave up all its intraday gains to close weaker against the US currency, on concerns of slowing dollar inflows and higher demand for the dollar from oil importers.
The home currency closed at 66.88—a level last seen on March 16, down 0.10% from its previous close of 66.81. The rupee opened at 66.74 a dollar and touched a low of 66.88. The rupee has closed weaker against the US dollar for nine out of 12 sessions.
Exit polls forecast another debacle for the Congress, a rebound for the Left and place the Bharatiya Janata Party (BJP) on the threshold of a historic win in Assam, at the conclusion of assembly elections in four states and the Union Territory of Puducherry.
Among other Asian currencies, South Korean won was up 0.5%, Malaysian ringgit 0.18%, Indonesian rupiah 0.11%, Taiwan dollar 0.08%, Philippines peso and China offshore increased 0.05% each. However, the Japanese yen was down 0.39%, Thai baht 0.25%, China renminbi 0.1%, Singapore dollar 0.05%.
India’s 10-year bond yield closed at 7.453%, as compared with its Monday’s close of 7.454%. It opened at 7.454% and touched a high of 7.463%, a level last seen on 29 April.
So far this year, the rupee has weakened 1.08%, while foreign institutional investors have bought $2 billion from the local equity market and sold $219.50 million in debt markets.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.579, up 0.01% from its previous close of 94.572.
A cashier at the ICICI bank branch in New Delhi places rupee notes in a counting machine. The rupee closed at 66.88 yesterday, a level last seen on March 16, down 0.10% from its previous close of 66.81.
