India Sensex Caps Third Weekly Gain as Banks Rise in Late Tradeby and
Gauge climbs 0.8% as traders close bearish bets on banks
Foreign investors remain net buyers for fifth straight day
A late surge in Indian lenders and industrials helped the benchmark stock index reverse an intraday loss and end higher for a third straight week.
State Bank of India, HDFC Bank Ltd. and ICICI Bank Ltd. were among the best performers on the S&P BSE Sensex, while Larsen & Toubro Ltd., the largest engineering company, rose to a one-month high. Maruti Suzuki India Ltd. and Tata Motors Ltd. advanced for a second day. Reliance Industries Ltd., the owner of the world’s largest refining complex, rose for a fifth day before its results.
The Sensex rose 0.8 percent to 27,214.60 at the close, after a rally in lenders in the final 90 minutes of the session helped the gauge cap a third week of gains, the longest winning streak since July 5. Banks climbed as some traders closed bearish bets after a three-day slide in the CNX Bank Nifty index earlier this week, according to Deven Choksey, managing director at K.R. Choksey Shares & Securities Pvt. in Mumbai. The premium on futures tied to the banking gauge almost doubled to 89.2 rupees from Thursday.
“Banks have significant weighting on the benchmark index,” Choksey said by phone.
Indian stocks have risen with global equities as weak economic data from China, Europe and the U.S. boosted speculation central banks will maintain stimulus measures. Global funds bought $410 million of domestic shares so far this month, after pulling a combined $3.5 billion in August and September.
“The global sentiment has turned positive on bets that the Fed won’t raise rates anytime soon,” said Shishir Bajpai, a director at Mumbai-based IIFL Wealth Management Ltd., which has $12 billion under management and advisory. “India benefits from the risk-on trade."
State Bank climbed 2.4 percent, HDFC Bank added 1.5 percent and ICICI Bank rose 1.3 percent. Larsen increased 2.9 percent, the best performer on the Sensex. Maruti closed at the highest level since Oct. 1, while Tata Motors rallied to more than a two-month high.
Reliance added 0.9 percent, taking the week’s gain to 2.8 percent. Second-quarter profit climbed 14 percent to 65.6 billion rupees ($1 billion), the Mumbai-based company said after market hours. Earnings beat the 58.8 billion-rupee mean of 12 analyst estimates compiled by Bloomberg.
Nestle India Ltd. rallied the most in more than two months after the company said it will resume sale of its Maggi noodles following laboratory tests that showed its products contained lead below approved limits.
International investors bought a net $62 million of Indian stocks on Oct. 15, taking this year’s inflow to $4.2 billion.
The Sensex has fallen 1 percent this year and trades at 15.8 times projected 12-month profits. The MSCI Emerging Markets Index is valued at a multiple of 11.1.