- Modi to meet opposition leaders to discuss compromise on GST
- Sensex headed for worst month since August as funds pull $753m
Indian stocks climbed, with the benchmark gauge completing a second weekly advance, amid optimism the government will push its proposal for a national sales tax through a parliamentary session that began Thursday.
State Bank of India and ICICI Bank Ltd. helped a gauge of lenders post its steepest jump in seven weeks. Hindalco Industries Ltd., an aluminum producer, was the biggest advancer on the S&P BSE Sensex after an eastern Indian state said it may soon allow the company to resume mining bauxite. Gati Ltd. extended the week’s rally to 16 percent, pacing gains among logistics firms amid optimism the unified tax bill will be cleared by lawmakers.
The S&P BSE Sensex added 0.7 percent to 26,128.2. The gauge climbed as much as 0.9 percent intraday on report that Prime Minister Narendra Modi has invited leaders of the main opposition Congress Party to discuss a compromise on passing a national sales tax, a proposal that’s been repeatedly blocked by opponents. The bill is his biggest move yet to push through one of India’s most important economic reforms since the 1990s.
The optimism on the GST bill “has built up over the last few days," Prasun Gajri, chief investment officer at HDFC Standard Life Insurance Co., said in an interview to Bloomberg TV India on Friday. “The market’s expectations from the parliamentary session are pretty low. So, if anything positive come out then that could be the trigger for the markets.”
Modi needs Congress’s support to get the legislation approved in parliament’s upper house, where his party is in minority. The GST aims to whittle down more than a dozen state levies to create a single market among the country’s 1.3 billion people for the first time. Political opposition to Modi picked up steam after his Bharatiya Janata Party lost state elections in Bihar this month, raising concern that his ability to push through reforms will be hampered.
State Bank surged 3 percent to its highest level since Oct. 26. ICICI Bank climbed 2.3 percent to advance a third day this week, while Bank of Baroda soared 5.4 percent, the most since Aug. 27. Axis Bank Ltd. added 1.2 percent to pare this year’s loss to 6 percent.
Gati jumped 4.1 percent. Gateway Distriparks Ltd. increased to its highest price since Oct. 19. VRL Logistics Ltd. extended this week’s gains to 7.5 percent. The stock has more than doubled since its listing on April 30.
Global funds sold a net $40.3 million of local shares on Nov. 26, paring this year’s inflows to $3.63 billion. They’ve withdrawn $793 million this month.
The Sensex has fallen 5 percent this year and trades at 15.5 times projected 12-month earnings. The MSCI Emerging Markets Index is valued at a multiple of 11.1.