Indian stocks climbed for the fourth week as overseas investors extended record purchases of the nation’s equities and as a report showed industrial production growth quickened in March.
The S&P BSE Sensex added 0.7 percent to 20,082.62 at the close in Mumbai, taking the week’s gain to 2.6 percent. That’s the longest stretch of weekly advance since the five-week rally that ended on Oct. 5. Volumes were 21 percent below the 30-day average. Maruti Suzuki India Ltd. increased 4.1 percent to a record and cigarette maker ITC Ltd. jumped 2.5 percent to an all-time high.
Foreigners have bought a net $12.4 billion of domestic shares this year, a record for the period, data from the market regulator show. Factory output in March expanded at the fastest pace in five months after the central bank cut borrowing costs thrice this year to help revive an economy that expanded at the weakest pace in a decade last year, data showed today.
“It’s primarily foreign money that’s driving the market,” Gaurav Doshi, a portfolio manager with Morgan Stanley India Financial Services in Mumbai, said in an interview to Bloomberg TV India today. “India has been showing signs of its macros improving, and we have managed to digest this earnings season better than what a lot of people were anticipating.”
Maruti jumped to close at a record 1,727.95 rupees as the yen weakened beyond 101 per dollar for the first time in four years today. The New Delhi-based carmaker last month reported March-quarter earnings almost doubled on a weaker yen that made purchases from Japan cheaper. Imports comprise about 23 percent of Maruti’s sales.
Tractor maker Mahindra & Mahindra Ltd. rose 2.4 percent to close at 970.2 rupees, an all-time high. Tata Motors Ltd., the owner of Jaguar Land Rover, jumped 3 percent to 309.05 rupees. The S&P BSE India Auto index climbed to a four-month high. The 10-member gauge rose 2.2 percent, the most among the 13 sector indexes compiled by the BSE Ltd.
Oil & Natural Gas Corp. increased 1.5 percent to 326.45 rupees, taking this year’s climb to 22 percent, the third-best performance on the Sensex. ITC rallied 2.5 percent to 353.15 rupees, a record. HDFC Bank Ltd., India’s most valuable lender, added 1.9 percent to 703.35 rupees.
India’s industrial production climbed 2.5 percent from a year ago after a revised 0.5 percent gain in February, official data showed today. The median of 26 estimates in a Bloomberg survey was for a 2.4 percent gain. The central bank forecasts economic growth will accelerate to 5.7 percent in the fiscal year through March 2014, compared with the baseline projection of 5.5 percent for the previous 12 months.
Global central bankers are poised to ease monetary policy even further after a wave of interest-rate cuts from India to Poland. South Korea’s rate cut yesterday was the 511th reduction worldwide since June 2007, according to Bank of America Corp.’s tally, done before Vietnam and Sri Lanka today said they’re trimming their rates.
“All major central banks are taking measures to pop up global asset markets, and within India, investors should be now looking to buy some of cyclical names to play this liquidity patch,” Mohammed Apabhai, head of Asia trading strategy at Citigroup Inc., told Bloomberg TV India today. “We are seeing an improved attitude toward risk.”
Profits at just two of the 14 Sensex companies that have reported March-quarter earnings have trailed estimates, data compiled by Bloomberg show. That compares with about 43 percent that missed forecasts in the three months ended Dec. 31, and 40 percent in the previous two quarters.
The Sensex rallied 10 percent from a seven-month low from April 9 through May 8 as foreign funds extended purchases amid monetary easing by central banks. The gauge is valued at 13.85 times forecast 12-month profits, the highest reading since Nov. 7, compared with the MSCI Emerging Markets Index’s 10.6 times.
The 50-stock CNX Nifty Index gained 0.7 percent to close at 6,094.75, its highest level since Jan. 4, 2011, while the Sensex reached its highest level since January 2011 intraday. India VIX, which gauges the cost of protection against losses in the Nifty, rose 1.6 percent to 16.86.