Indian equities advanced for a second day amid advances in Asian stocks and as some traders closed their bets before expiry of the monthly derivative contracts.
Dr. Reddy’s Laboratories Ltd., the nation’s third-biggest drugmaker by market value, increased for the first time in five days, while its competitor Cipla Ltd. climbed the most in three months. Hindustan Unilever Ltd., India’s biggest home-products maker, gained the most in a week and ITC Ltd., the top tobacco company, had its steepest climb this year. Blue Dart Express Ltd. and Gati Ltd. led logistics firms higher after the Cabinet approved changes to a bill on national tax.
The S&P BSE Sensex added 0.5 percent to 27,705.35 at the close Thursday. The gauge had dropped 3.7 percent in four days through Tuesday. Asian equities rose after Federal Reserve said the U.S. labor and housing markets had improved, while refraining from providing timing for raising the near-zero rates that have helped fuel demand for riskier assets. Economists have put the chance of a September increase at 50 percent.
“There is some short covering happening ahead of expiry, and global cues are positive as there’s no imminent rate hike by the Fed,” Alex Mathews, the head of research at Geojit BNP Paribas Financial Services Ltd., said by phone from Kollam in the southern state of Kerala.
The rollover rate in Nifty July futures, due to expire on Thursday, was at 64 percent in Mumbai.
Dr. Reddy’s jumped 5.4 percent, the most since Feb. 12 and the best performer on the Sensex. The company posted profit of 6.26 billion rupees ($98 million) for the June quarter, exceeding the 5.54 billion rupees estimated in a Bloomberg survey of analysts.
ITC, Reliance Industries
Cipla increased 4.6 percent, the second-biggest gainer on the Sensex.
Reliance Industries Ltd., owner of the world’s largest refining complex, added 0.4 percent. Hindustan Unilever added 2.4 percent.
ITC rallied 3.9 percent, the most since Dec. 4. Net income rose 4 percent from a year ago to 22.7 billion rupees, compared with 23.3 billion rupees estimated in a Bloomberg survey.
NTPC Ltd., the largest power generator, posted a profit of 21.4 billion rupees, matching the 21.2 billion rupees forecast in a Bloomberg survey. The stock added 0.3 percent.
Bank of Baroda surged 10 percent, the most since May 11, after the lender posted earnings of 10.5 billion rupees. Net income had been projected to drop 35 percent to 8.84 billion rupees, according to a Bloomberg survey.
Eleven of the 16 Sensex companies, or 69 percent, that have posted earnings for the June quarter have matched or beaten estimates, compared with 40 percent in the March quarter.
Blue Dart jumped 5.1 percent, the most since May 14, while Gati increased 5 percent to its highest level since May 22 amid speculation trade will pick up after the planned implementation of a nation-wide sales tax by April 2016. Snowman Logistics Ltd. added 2.3 percent and Transport Corp. climbed 4.1 percent.
“On GST, the situation is turning out to be brighter than before,” Deven Choksey, managing director at Mumbai-based K.R. Choksey Shares & Securities Pvt., said in an interview with Bloomberg TV India. “All eyes are on the clearance of the GST bill in this session of parliament. If it happens, we will see the market coming back into confidence.”
Parliament has failed to transact any business since it began on July 21 as the opposition demanded resignations of three key members of Prime Minister Narendra Modi’s party over graft allegations. A nationwide goods-and-services tax is one of the nation’s biggest reform proposals in decades.
The Sensex has risen 0.8 percent this year.