Indian stocks advanced for a sixth day, led by banks and software stocks, as foreign investors raised holdings of local shares and after U.S. President Barack Obama won re-election.
The BSE India Sensitive Index, or Sensex, increased 0.5 percent to 18,902.41, its highest close since Oct. 5. State Bank of India, the largest, climbed 2 percent. Infosys Ltd., the software exporter that got 64 percent of its revenue from North America in the year ended March, led its peers higher.
Overseas funds were buyers of local equities for a fourth straight day on Nov. 5, purchasing a net $76 million of shares, data from the regulator show. Obama defeated Republican Mitt Romney, boosting optimism that the U.S. Federal Reserve will add to stimulus in the world’s largest economy. He now faces negotiating with Congress to avoid the so-called fiscal cliff of more than $600 billion in spending cuts and tax increases scheduled to take effect in January.
“There’s an element of certainty as far as continued liquidity is concerned,” U.R. Bhat, managing director of Dalton Capital Advisors India Pvt., said by telephone. “Having won, Obama will now face the fiscal cliff problem. The House of Representatives is controlled by the Republicans, so there will be lot of negotiations. Hard economic issues will occupy center stage after the relief rally fades.”
Thirty-day volatility in the Sensex was at 10.69, near the year’s lowest reading of 10.04 set on Sept. 11, the data show. Four of the 30 stocks in the Sensex climbed to their highest level in at least 52 weeks, data compiled by Bloomberg show.
State Bank climbed 2 percent to 2,217 rupees, its biggest gain since Oct. 18. ICICI Bank Ltd. increased 1.1 percent to 1,092.95 rupees, its highest close since July 2011.
Infosys advanced 1 percent to 2,404.4 rupees, the highest level since Oct. 11. Tata Consultancy Services Ltd. added 0.8 percent to 1,331.50 rupees, its highest close since Sept. 17.
Seven, or 29 percent, of the 24 Sensex companies that have reported earnings for the quarter ended September have lagged behind analysts’ estimates. That compares with 40 percent of the index companies missing forecasts in the June quarter, data compiled by Bloomberg show.
Bharti Airtel Ltd., India’s largest mobile-phone operator, lost 1 percent to decline to a one-week low of 271.10 rupees. Second-quarter net income retreated 30 percent to 7.21 billion rupees ($133 million), missing the 7.27 billion-rupee median of 18 analysts’ estimates in a Bloomberg survey.
Tata Power Co., the biggest non-state generator, slumped 2.5 percent to 103.80 rupees, the most in a month, after yesterday posting a surprise group loss of 838 million rupees. The median estimate in a Bloomberg survey was for profit of 2.56 billion rupees.
Tata Motors Ltd., the owner of luxury brands Jaguar and Land Rover, reported second-quarter group profit increased 11 percent to 20.8 billion rupees. That missed the 24.3-billion rupee median of 34 analysts’ estimates in a Bloomberg survey. The stock closed 0.9 percent higher at 269.35 rupees before the earnings were announced.
The Sensex has increased 22 percent this year, driven by overseas fund purchases and government policy reforms announced since mid-September to revive economic growth. Foreigners have bought a net $18.4 billion of local shares this year, the most among 10 Asian markets tracked by Bloomberg, excluding China.
The measure is valued at 15.1 times estimated earnings, compared with a multiple of 11.6 times for the MSCI Emerging Markets Index, data compiled by Bloomberg show.
Prime Minister Manmohan Singh started the biggest policy overhaul in a decade on Sept. 13, including fuel-subsidy curbs and a push to spur investment in domestic industries. Singh and the Congress party’s top leadership presented a united front for the reforms at a weekend gathering of tens of thousands of supporters. Opposition parties are threatening a no-confidence vote at the next session of parliament due to begin on Nov. 22.
The S&P CNX Nifty Index increased 0.6 percent to 5,760.10 while its November futures settled at 5,793.25. India VIX, which gauges the cost of protection against losses in the Nifty, dropped 4.6 percent to 14.51.
The National Stock Exchange of India and the BSE traded 773 million shares yesterday, compared with a 12-month daily average of 912 million.