Indian stocks climbed the most in four weeks as drugmakers rallied on higher earnings and metal companies advanced.
Sun Pharmaceutical Industries Ltd., India’s biggest drugmaker, jumped the most since 2009 after posting a 56 percent gain in net income before a one-time charge. Tata Steel Ltd. soared 8.1 percent before earnings tomorrow. State Bank of India led declines for lenders as policy makers announced steps to drain cash from the financial system to boost the rupee.
The S&P BSE Sensex rose 0.8 percent to 18,946.98 at the close in Mumbai, the most since July 18. The government will release data on consumer prices and factory output later today. Earnings and economic data are setting the tone for the market along with concern about the rupee, said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd.
“A rally in drugmakers is overshadowing the decline in bank stocks,” Mathews said by telephone from the southern city of Kochi. “Investors are also buying beaten-down sectors like metals.”
Sun Pharmaceutical surged 7.1 percent to 541.7 rupees, the most since May 2009. The exporter’s profit jumped after sales of its generic drugs in the U.S. climbed. Cipla jumped 2.3 percent to 418.75 rupees after its first-quarter earnings beat analyst estimates.
Tata Steel surged 8.1 percent to 236.55 rupees amid speculation lower raw material costs will boost profit. The company will benefit from a fall in contract prices of iron ore and coking coal, said Giriraj Daga, an analyst at Nirmal Bang Equities Pvt.
Jindal Steel & Power Ltd. advanced 9.3 percent to 226.6 rupees. Sterlite Industries (India) Ltd. increased 3.2 percent to 78.65 rupees. The S&P BSE Metal Index rallied 4.5 percent, extending last week’s 5.3 percent surge.
About 45 percent of Sensex companies that have reported earnings so far for the June quarter missed analyst estimates. That compares with 27 percent companies that missed forecasts for the March quarter and 43 percent in the three months through December, data compiled by Bloomberg show.
The Sensex has retreated 2.5 percent this year and trades at 13.3 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 10.
The government may announce measures to boost the currency today such as higher import duties, CNBC-TV18 reported, without saying where it got the information.
The Reserve Bank of India said on Aug. 8 that it plans to sell 220 billion rupees ($3.6 billion) of cash management bills every Monday, stepping up efforts to bolster the rupee by curbing supply of the currency. The measure, which follows a review of the impact of earlier measures to steady the currency, is for “effective liquidity management,” it said.
The Indian currency fell to an all-time low of 61.805 per dollar on Aug. 6. The rupee has slumped about 12 percent against the dollar in the past six months even as the monetary authority restricted banks’ access to cash, curbed trading in currency derivatives and raised two interest rates.
State Bank of India tumbled 3.5 percent to 1,605.35 rupees. The biggest lender’s first-quarter profit dropped more than analysts estimated as bad loans climbed amid a slowdown in Asia’s third-largest economy. HDFC Bank fell 1.4 percent to 602.2 rupees. The S&P BSE Bankex slid 1.1 percent to a one-week low.
India will release industrial production data for June at 5:30 p.m. in New Delhi. Factory output probably dropped 1.1 percent, a second straight month of declines, according to the median of 27 estimates in a Bloomberg survey.
Consumer price inflation probably slowed to 9.7 percent in July from 9.87 percent the previous month, according to the median of 17 estimates in a Bloomberg survey.
The CNX Nifty Index on the National Stock Exchange gained 0.8 percent to 5,612.40. India VIX, which gauges the cost of protection against losses in the Nifty, rose 0.4 percent.