India’s Sensex Caps Fourth Weekly Advance on ECB Stimulus Boost

  • Power utilities, energy, banks among biggest Sensex gainers
  • Foreigners were net buyers of stocks for eighth straight day

Indian equities climbed for the first time in three days, capping a fourth weekly advance, as global stocks rallied after the European Central Bank signaled it may boost stimulus.

ITC Ltd., the biggest cigarette company, was the best performer on the S&P BSE Sensex. GAIL India Ltd., the largest natural-gas supplier, and Oil & Natural Gas Corp., the largest explorer, climbed at least 1.5 percent each. NTPC Ltd., the top power producer, rose to a two-month high. Axis Bank Ltd. surged to a one-month high, helping a measure of lenders climb most among 13 sector indexes.

The Sensex rallied 0.7 percent to 27,470.81 at the close, taking the week’s climb to 0.9 percent. Asian stocks joined a global equities rally after ECB President Mario Draghi said policymakers will re-examine the degree of stimulus in December, adding that the quantitative-easing program will continue beyond September 2016 if needed. Indian markets were closed on Thursday for a holiday.

“The ECB has probably been one of the more constructive central banks in understanding the right things to say to provide the markets and the broader economy with comfort," Adrian Mowat, the chief Asian and emerging-market equity strategist at JPMorgan Chase & Co. in Hong Kong, said in an interview with Bloomberg TV India on Friday. “There’s also speculation of little bit more easing from the Bank of Japan.” JPMorgan favors financials, building materials and consumer discretionary companies in India, he said.

The ECB’s willingness to consider adding stimulus comes as reports from the largest economies have highlighted how sliding demand is colliding with the plunge in commodity prices to make central banks’ inflation goals ever-more elusive. The BOJ and Federal Reserve both consider monetary policy next week, with traders offering just a 6 percent chance of an increase to U.S. rates.

The MSCI All-Country World Index was poised for the longest streak of weekly gains since February, and the Stoxx Europe 600 Index climbed a second day.

Company Earnings

Wipro Ltd., India’s third-biggest software maker, fell 1.8 percent. Second-quarter earnings climbed 7.7 percent to 22.4 billion rupees ($344 million), the company reported after markets closed on Wednesday, matching the 22.3 billion-rupee forecast of analysts surveyed by Bloomberg.

So far, six of the eight Sensex companies that have announced September-quarter results have matched or beaten estimates.

Idea Disappoints

Idea Cellular Ltd. plunged 7.5 percent, the most since Feb. 10, 2014, after the carrier’s net income and sales missed estimates. Group profit rose 7 percent to 8.09 billion rupees, compared with the median forecast of 8.35 billion rupees.

GAIL India increased 2.3 percent to its highest level since Aug. 19. Oil & Natural Gas rose 1.5 percent. NTPC gained 2.1 percent to its highest level since Aug. 7.

Axis Bank rallied 2.7 percent in an eighth day of advance. State Bank of India added 1.4 percent. ICICI Bank Ltd., the country’s second-biggest lender, rose 1.3 percent, its first climb this week.

Tata Motors Ltd., owner of Jaguar Land Rover, is headed for its best month since January 2012. ITC surged 2.8 percent to its highest level since Feb. 28. Infosys Ltd., the second-largest software services provider, rose 1 percent, taking this week’s advance to 5 percent, the most on the Sensex.

Global funds bought a net $97 million of Indian equities on Oct. 20, an eighth day of inflows, the longest stretch since March. That took this year’s purchases to $4.4 billion.

The Sensex has dropped 0.1 percent this year and trades at 15.9 times projected 12-month earnings. The MSCI Emerging Markets Index is valued at a multiple of 11.4.

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