Sensex Rises to 2-Week High as Idea Leads Indian Telecom Rally

Indian stocks climbed for a sixth day, with the benchmark index rising to within 0.3 percent of a record, as better-than-estimated company earnings boosted investor confidence in the nation’s equities.

Idea Cellular Ltd. rose the most in more than five months after group profit surged 57 percent. Bharti Airtel Ltd. jumped the most in seven weeks, while Reliance Communications Ltd. had the steepest advance in two months after the India’s telecommunications regulator issued recommendations on sharing airwaves. Asian Paints Ltd. climbed to a record after reporting profit that topped estimates.

The S&P BSE Sensex climbed 1.2 percent to 26,025.80 at the close, the longest streak of gains in almost four months. Foreigners have bought $11.8 billion of local shares this year, the most in Asia, betting that Prime Minister Narendra Modi’s government will revive economic growth and curb inflation. First-quarter earnings at four of the six Sensex companies that have reported results so far have exceeded analyst estimates.

“We see this rally sustaining on the back of corporate earnings and policy reforms by the government,” D.K. Aggarwal, chairman of SMC Investments & Advisors Ltd., said by phone from New Delhi today. “The earnings season has been good so far.”

Idea jumped 5 percent, paring this year’s decline to 12 percent. First-quarter group net income rose to 7.28 billion rupees ($121 million), beating estimates, the company said after market hours yesterday. Bharti also surged 5 percent, the most since June 2, while Reliance Communications increased 3.9, the steepest gain since May 23.

Spectrum Sharing

Idea and Bharti are “well positioned” to benefit from the proposed sharing of airwaves, BNP Paribas Securities India Pvt. analysts Kunal Vora and Kunal Patel said in a note dated yesterday. Sharing spectrum can be useful for operators that are facing network-capacity issues, they wrote.

“Spectrum sharing is a significant leap of faith by the government,” Prakash Diwan, a director at Altamount Capital Management Pvt., told Bloomberg TV India today. The move is likely to help reduce the cost of mobile-phone services, he said.

Asian Paints increased 1.7 percent to 603.60 rupees. Group net income climbed 23 percent to 3.39 billion rupees, beating analyst estimates.

Reliance Industries Ltd., the owner of the world’s largest refining complex, rallied 3.3 percent, the most since May 19. Housing Development Finance Corp., the largest mortgage lender, climbed 3 percent to an all-time high. Both companies had led gains on the Sensex yesterday after reporting quarterly profit that exceeded estimates.

Tata Motors, Axis Bank

Tata Motors Ltd., owner of Jaguar Land Rover, and software exporter Tata Consultancy Services Ltd., climbed to records.

Axis Bank Ltd. fell 0.4 percent. First-quarter net income rose 18 percent to 16.7 billion rupees, matching estimates, the lender reported after trading ended today.

The Sensex has increased 23 percent this year, the best performer among the world’s 10 biggest markets, and trades at 15.9 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s multiple of 11.1. The Indian gauge closed at an all-time high of 26,100.08 on July 7.

Foreign funds bought $40.6 million of local stocks on yesterday, according to data compiled by Bloomberg.

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