Indian stocks advanced for a fifth day, led by lenders, after Moody’s Investors Service raised the nation’s credit-rating outlook. Bonds climbed.
The S&P BSE Sensex rose 0.6 percent to 28,885.21, capping the longest run of gains in seven weeks. The yield on sovereign bonds maturing July 2024 fell one basis point to 7.77 percent, while the rupee was little changed.
Moody’s affirmed India’s Baa3 rating and the outlook was revised from stable, signaling confidence in the efforts by Prime Minister Narendra Modi and central bank Governor Raghuram Rajan to boost economic growth. The Sensex has risen 5 percent since Jan. 1, fueled by $6.2 billion in overseas inflows, the highest among eight Asian markets tracked by Bloomberg.
The upgrade “is warranted given the number of marginal improvements going on in terms of policies and the position of India in the world economy,” Jim O’Neill, the former chairman of Goldman Sachs Asset Management and a Bloomberg View columnist, said in an interview to Bloomberg TV India today.
Reliance Industries Ltd., owner of the world’s largest refining complex, was the best performer on the Sensex today. The stock has surged 8.5 percent since Tuesday, the biggest three-day climb since last May.
ICICI Bank Ltd., the biggest private lender, advanced 1.8 percent, ending three days of losses. State Bank of India and HDFC Bank Ltd. gained at least 2 percent each.
Tata Steel Ltd. rose to a four-week high, while Hindustan Unilever Ltd. climbed 1.5 percent.
A gauge of drugmakers declined the most in three months after Bank of America Corp. downgraded health-care companies citing valuations. The S&P BSE India Healthcare Index trades at 29 times projected 12-month profits versus a multiple of 16.1 for the Sensex.
Sun Pharmaceutical Industries Ltd., the best performer on the Sensex this year, retreated for a third day after reaching a record on Monday. Dr. Reddy’s Laboratories Ltd. fell from an all-time high. Sun Pharma was cut to underperform from buy at Bank of America, while Lupin Ltd., Cipla Ltd. and Cadila Healthcare Ltd. were trimmed to neutral from buy, analyst Manoj Garg wrote in an investor note today.
Global investors bought a net $41 million of local shares on April 7, a fourth straight day of inflows. Foreign investors had bought $16 billion of stocks last year.