- Lupin jumps 6% after FDA closes Goa plant 2015 inspection
- Media companies jump on proposal to raise FDI limit to 49%
Most Indian stocks dropped as trading resumed after a public holiday on Wednesday, with software exporters and material producers offsetting gains in finance and health-care companies.
Three stocks dropped for every two that climbed on the the S&P BSE Sensex, which added 0.1 percent at the close after changing direction at least nine times. The gauge rose to an eight-month high on Monday before sliding 0.4 percent the following day.
Tata Consultancy Services Ltd., the largest software exporter, and Tata Steel Ltd., were the biggest drags on the gauge, falling 2.2 percent and 4.8 percent each. Drugmaker Lupin Ltd. jumped 6 percent in the last few minutes of trade after the U.S. FDA closed inspection carried out at Goa plant in July 2015. Dr. Reddy’s Laboratories Ltd. rallied to its highest price since November. Housing Development Finance Corp. and HDFC Bank Ltd. led gains among financial companies.
The Sensex has rallied 19 percent from a low in February, approaching the 20 percent advance that defines a bull market. The gains have been powered by forecasts for above-normal rain after back-to-back droughts and as earnings recovered in the three months ended March after falling in four of the previous five periods. All eyes are now on the June-quarter reporting season that begins next week with Infosys Ltd. on July 15.
“We see the market consolidating at current levels,” said Chokkalingam G., managing director at Equinomics Research & Advisory Pvt. in Mumbai. “The next leg up will come from the June quarter earnings and further progress of the monsoon rains. The monsoon session of parliament is also important as the GST bill may be passed."
The government is confident the goods-and-services tax bill will be passed in the monthlong session of parliament that starts July 18, Santosh Gangwar, who took charge as Junior Finance Minister on Wednesday, said in New Delhi.
Shares of media companies soared after news that the government is considering a plan to raise the limit on foreign direct investment in newspapers and magazines. The Finance Ministry recommended raising the cap to 49 percent from 26 percent, bringing it on par with that for news television channels, two government officials said, asking not to be identified citing rules for speaking with the media. The Department of Industrial Policy and Promotion will decide on the matter, they added.
Jagran Prakashan Ltd., publishers of one of India’s most-read Hindi newspapers, jumped to a record 182.4 rupees. HT Media Ltd. surged 4.1 percent.
The Sensex has risen 4.2 percent this year and trades at 16.4 times projected 12-months profits, versus a five-year mean of 14.3 and a multiple of 11.8 for the MSCI Emerging Markets Index, data compiled by Bloomberg show. Foreign investors bought $44 million of local shares on July 5, taking this year’s inflows to $3 billion.