India’s Nifty Touches 9,000 as Tata Group, Reliance Shares Rally

Indian stocks rose, with the CNX Nifty index topping 9,000 mark for the first time, amid expectations that Prime Minister Narendra Modi’s first full budget will make the South Asian nation the fastest growing in the world.

Reliance Industries Ltd., the owner of the world’s largest refining complex, climbed the most in year as CLSA Asia-Pacific Markets advised investors to buy. Tata Consultancy Services Ltd. surged to an all-time high, leading Tata group companies higher. Sun Pharmaceutical Industries Ltd. gained to a two-week high after buying GlaxoSmithKline Plc ’s opiates business in Australia.

The benchmark S&P BSE Sensex rose 0.5 percent to 29,593.73 at the close, a one-month high, while the Nifty increased 0.4 percent to a record 8,996.25. Finance Minister Arun Jaitley on Saturday projected a wider fiscal deficit and boosted funding for infrastructure by 25 percent to $11.3 billion, in an effort to boost Asia’s third-biggest economy.

“People are digesting the complex budget and seeing good things from it,” Jim O’Neill, the former chairman of Goldman Sachs Asset Management and a Bloomberg View columnist, said in an interview to Bloomberg TV India today. “There’s quite a lot of potentially very important things in the medium to long term that will positively benefit India. This is helping sentiments get better and better.”

Spending on roads, ports and power plants will climb 25 percent from the amount actually delivered in the year ending on March 31, Jaitley said. India’s economy is projected to grow as much as 8.5 percent in the year starting April 1, according to the latest government estimates, the fastest pace among the world’s biggest emerging markets.

Surpassing China

In comparison, China’s government may set a growth target of about 7 percent for this year, the official Xinhua News Agency reported. The forecast, which would be below the 2014 target, may be announced at the start of the National People’s Congress on Thursday.

“We might be in the very early stages of India having multiple years of growth above the Chinese level,” O’Neill said. “If that is the case, people might be gradually re-rating their GDP and their earnings forecasts.”

Reliance surged 4.2 percent, the most since March 2014. The stock trades at 11.3 times projected 12-month earnings, a 32 percent discount to the Sensex, after lagging behind the 41 percent advance in the Sensex over the past year. CLSA analyst Vikash Kumar Jain advised investors to buy “this weakness” in the stock. The shares can rally 39 percent over the next 12 months, Jain estimates.

Tata Consultancy, Sun Pharma

Tata Consultancy advanced 4 percent to an all-time high. Tata Metaliks Ltd. soared 16 percent, the most since Oct. 22. Tata Elxsi Ltd. jumped the by limit 20 percent. Tata Sponge Iron Ltd. increased 18 percent, the most since July 24. Tata Global Beverages Ltd. jumped 3.3 percent.

Sun Pharmaceutical rose to its highest level since Feb. 5, while Cipla Ltd. increased 2.1 percent. Housing Development Finance Corp., the biggest mortgage lender, climbed 2.1 percent.

Mahindra & Mahindra Ltd., the largest maker of tractors, dropped 3.6 percent after sales fell 10 percent last month. Tata Motors Ltd., owner of Jaguar Land Rover, slid 1.9 percent after it said JLR India sales declined to 179 units in February from 190 a year earlier.

Foreigners bought a net $79.2 million of local shares on March 1, taking this year’s inflows to $4.5 billion, the second-highest among eight Asian markets tracked by Bloomberg, after Taiwan.

The Sensex has gained 7.6 percent this year and trades at 16.6 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 11.8.

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