Sensex Extends Three-Week Rally as Reliance Climbs on Profit

  • Reliance jumps most in 4 months as earnings exceed estimates
  • Profit at 3 of 4 Sensex firms beat or match analyst forecasts

Indian stocks advanced, led by energy companies, after Reliance Industries Ltd. reported better-than-expected earnings.

Reliance, owner of the world’s largest refining complex, surged the most in 19 months. Bharti Airtel Ltd., India’s largest mobile-phone operator, climbed to a two-month high. Hindustan Unilever Ltd., India’s biggest household products maker, ended an eight-day decline. Infosys Ltd., a software exporter, rallied for the first time in six days.

The S&P BSE Sensex added 0.6 percent to 27,364.92 at the close in Mumbai. The gauge capped a third straight week of gains on Friday, rising above its 100-day average for the first time since August, after the Reserve Bank of India on Sept. 29 cut its main interest rate by twice as much as most economists surveyed by Bloomberg predicted. Three of the four firms that have posted earnings for the September quarter have beaten or matched analyst estimates, data compiled by Bloomberg show.

“The earnings season so far has been better than expected, and Reliance is supporting the market after its results,” Alex Mathews, the head of research at Geojit BNP Paribas Financial Services Ltd., said by phone from the southern state of Kerala. “The market will remain positive as the benchmark gauges are trading above their 100-day averages.”

Reliance’s net income, excluding units, increased 14 percent to 65.61 billion rupees ($1 billion) in the September quarter as gross refining margins expanded, the Mumbai-based company said after trading ended on Friday. That is the fastest pace of profit growth in nine quarters and beat the 58.4 billion-rupee average of 12 analyst estimates compiled by Bloomberg. The shares soared 5.6 percent, the most since May 7, 2014.

Bharti surged 4 percent to its highest level since Aug. 21. Hindustan Unilever increased 1.2 percent, ending an eight-day, 5.4 percent tumble. Infosys added 1.6 percent, halting last week’s 6.2 percent drop after it cut its yearly sales outlook. Lupin Ltd., a drugmaker, added 0.9 percent, taking this year’s gains to 45 percent, the most on the Sensex.

International investors bought a net $62 million of Indian stocks on Oct. 15, taking this year’s inflows to $4.1 billion. The Sensex has fallen 0.5 percent in 2015 and trades at 15.8 times projected 12-month profits. The MSCI Emerging Markets Index trades at 11.4 times.

The 50-stock CNX Nifty index on the NSE added 0.5 percent to 8,275.05, closing above its 100-day moving average of 8,206 for a second day.

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