- Energy companies climb as government eases gas prices
- Real-estate bill passage drives up property developers
Indian stocks climbed, with the benchmark index capping a second weekly gain, as energy companies and property developers increased after the government accelerated measures aimed at attracting investments and bolstering economic growth.
Cairn India Ltd. climbed to a four-month high after the government freed prices of natural gas extracted from deep sea fields that start production this year. DB Realty Ltd. was the top performer on a gauge of realty companies after the upper house of parliament passed a bill to set up an industry regulator. Adani Ports & Special Economic Zone Ltd. rallied the most in a week, while Lupin Ltd., a drugmaker, climbed to a one-month high.
The S&P BSE Sensex added 0.4 percent at the close in Mumbai. Lawmakers on Thursday passed the real estate bill and eased rules for mining companies, stoking optimism that Prime Minister Narendra Modi’s Bharatiya Janata Party may succeed in garnering support for crucial bills on a national sales tax and a new bankruptcy code that have been blocked by opposition parties in parliament.
“There’s been consistent effort to streamline policies and yesterday’s measures by the cabinet and the bills cleared in parliament are incremental steps in the right direction," Vaibhav Sanghavi, managing director at Mumbai-based Ambit Investment Advisors Pvt., said in an interview. His fund is bullish on consumer-discretionary companies such as makers of cars and paints, and private banks.
The cabinet approved an amendment to its mining laws that will allow companies to more freely sell assets, as part of Modi’s effort to improve ease of doing business in Asia’s third-largest economy. The proposal now needs parliament’s approval to become law.
The Sensex has risen in seven out of eight days after Finance Minister Arun Jaitley in his Feb. 29 budget pledged to further cut the fiscal deficit, stoking speculation of an interest-rate cut by the central bank. The budget proposals, which include a boost in spending on public and rural welfare projects, have spurred capital inflows. Foreign funds have bought $1.4 billion of local shares this month, paring this year’s outflows to $1.5 billion.
Asian and European stocks climbed as investors assessed the European Central Bank’s fresh stimulus measures announced Thursday. European shares jumped and tumbled on Thursday as ECB President Mario Draghi delivered interest-rate cuts, more bond purchases and a potential subsidy to lenders and then said the central bank is done with lowering borrowing costs for now. The Stoxx Europe 600 Index soared 2.2 percent on Friday.
Cairn India jumped 4.5 percent, while Hindustan Petroleum Corp Ltd. and Bharat Petroleum Corp Ltd. rose 1.2 percent each. DB Realty surged 3.5 percent. Rival Phoenix Mills Ltd. gained 0.8 percent to take this week’s surge to 19 percent. Unitech Ltd. rallied 13.5 percent this week.
The Sensex has fallen 5.4 percent this year and trades at 15.1 times its projected 12-month earnings compared with 11.6 times for the MSCI Emerging Markets Index.