Most Indian Stocks Gain Before RBI Policy as Bajaj ClimbsRajhkumar K Shaaw
Most Indian stocks advanced as a late rally in metalmakers helped the benchmark gauge erases earlier losses after the central bank left interest rates unchanged.
Tata Steel Ltd. jumped the most in 10 months, while Sesa Sterlite Ltd., a copper producer, had the biggest gain in three weeks. NTPC Ltd. and Tata Power Co., the top generators, were among the best performers on the S&P BSE Sensex. Axis Bank Ltd. paced losses among lenders, while property developer DLF Ltd. ended a two-day, 5.8 percent rally.
Sixteen stocks rose and 13 declined on the Sensex, which climbed less than 0.1 percent to 28,516.59. The gauge erased an intraday loss of 0.8 percent after the Reserve Bank of India kept the benchmark rate at 7.50 percent, a move predicted by 33 of 42 economists in a Bloomberg survey. Key to the RBI’s next move will be whether banks pass on two previous rates cuts and steps by the government to ease supply, Rajan said.
“We were not expecting anything big-bang in this policy,” Mihir Vora, the Mumbai-based chief investment officer at Max Life Insurance Co., which has $4.8 billion in assets, said by phone. “There was no rationale to do anything extra from what has been done.” Vora said he expects the RBI to cut rates by 50 basis points in the year ending March 2016, and is bullish on auto-part makers, engineering and construction firms.
After unscheduled reductions that put India in the group of almost 30 central banks easing monetary policy this year, Rajan’s pause reflects a desire to ensure inflation stays below a target of 6 percent by January. India is “better buffered” against volatility that may arise from a move by the U.S. to raise interest rates, Rajan said.
Tata Steel soared 4.8 percent, the best performance on the Sensex, while Sesa Sterlite rallied 3.3 percent to its highest level since March 12. The S&P BSE India Metal Index jumped 2.2 percent, the most since Feb. 27.
SKS Microfinance Ltd. soared 8.6 percent, the most in four months after the RBI raised borrowing limits for an individual by micro-finance institutions. Manappuram Finance Ltd. gained
3.5 percent, while Muthoot Finance Ltd. increased 1.3 percent.
Axis Bank declined 2 percent and State Bank of India, the biggest lender by assets, slid 1 percent. ICICI Bank Ltd. lost
DLF tumbled 3.3 percent, the second-worst performer on a gauge of 13 property developers. The index fell the most among 13 sectoral gauges compiled by the BSE Ltd.
Sun Pharmaceutical Industries Ltd. declined from a record, paring this year’s gains to 39 percent, still the most on the Sensex. Dilip Shanghvi, the richest Indian and the drugmaker’s founder, added about $2 billion to his wealth on Monday, the most by any billionaire in the world, according to the Bloomberg Billionaires Index.
Foreigners bought a net $163.2 million of shares on April 6, taking this year’s inflow to $6.3 billion, the most among eight Asian markets tracked by Bloomberg.
The gauge has risen 3.7 percent this year and trades at
15.9 times projected 12-month profits, versus the MSCI Emerging Markets Index’s multiple of 12.2.