June 10 (Bloomberg) -- India’s benchmark stock index rose to an all-time high, erasing an earlier loss, as gains in technology shares countered declines in metalmakers and lenders.
Software exporter Infosys Ltd. climbed the most in three weeks, leading its peers higher. Tata Steel Ltd., the nation’s biggest producer of the alloy, ended a seven-day rally. State Bank of India Ltd. dropped for a second day.
The S&P BSE Sensex erased an intraday loss of 0.9 percent in last half-hour of trade to end with a gain of less than 0.1 percent at 25,583.69. The gauge has risen 21 percent this year amid optimism Prime Minister Narendra Modi will boost spending and speed up project clearances to revive growth from near a decade low. Foreigners bought a net $578.7 million of local shares on June 6, taking this year’s inflows to $9.1 billion, the most among eight Asian markets tracked by Bloomberg.
“I wouldn’t try and bet against this market,” Anil Ahuja, chief executive officer of Singapore-based IPEplus Advisors, told Bloomberg TV India today. “A couple of billion dollars more and this market can go to another level.”
Infosys rallied 3 percent, paring this year’s loss to 12 percent. Tata Consultancy Services Ltd., India’s top software exporter, rose 2.1 percent. Wipro Ltd. jumped 2.6 percent.
Tata Steel declined 2.9 percent, paring a seven-day rally to 23 percent. Sesa Sterlite Ltd. tumbled 2.4 percent. State Bank of India lost 1.6 percent, while Axis Bank Ltd. slid 1.8 percent. Cement maker Grasim Industries Ltd., which had soared 12 percent yesterday, fell 3.2 percent.
Stocks slid earlier amid concern inadequate monsoon rain will hurt farm output, potentially boosting inflation. Showers during the June-September period, crucial for crops from sugar to rice and cotton, will be 93 percent of a 50-year average, the state-owned weather office said on its website yesterday. That’s less than 95 percent of the average predicted in April.
The value of Indian equities has climbed by $150 billion, or 11 percent, after Modi’s party swept to power on May 16. Oil companies, power utilities, metalmakers and banks led the surge as investors bought companies most tied to the economy, while software makers and drugmakers fell. The rally has pushed the Sensex’s 14-day relative strength index to 79.6, the highest reading in two weeks. Some investors see readings above 70 as a signal to sell.
“The uptrend is quite strong and we’re not seeing signs of a major correction,” Sameet Chavan, a technical analyst at Angel Broking Ltd., said on Bloomberg TV India today. The CNX Nifty Index has “key support” at 7,580 level, he said. That’s 1 percent below today’s closing of 7,656.40.
Modi won the strongest electoral mandate in 30 years on a pledge to spur an economy where $230 billion of projects have been stalled for want of state clearances. The government has pledged to build 100 new cities, run high-speed trains, cut red tape to ease doing business and cool inflation to boost growth, President Pranab Mukherjee told lawmakers yesterday.
“India is a hope-turning-into-reality play,” IPEplus’ Ahuja said.
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