Indian Stocks Climb for Second Day as Global Equities, Oil Rallyby
Crude oil extends gains as Iran supports output-freeze plan
Dr. Reddy's, ONGC top performers on Sensex; ICICI, Hero Gain
Indian stocks climbed for a third day this week as Asian stocks joined a global recovery and crude prices advanced.
Dr. Reddy’s Laboratories Ltd. was the best performer on the S&P BSE Sensex. Larsen & Toubro Ltd., the most valuable engineering firm, rose to a one-month high. Oil & Natural Gas Corp. climbed the most in six months and Hero MotoCorp Ltd. gained for a fourth day. ICICI Bank Ltd., the country’s biggest private lender, climbed 2.8 percent.
The Sensex added 1.1 percent at the close in Mumbai. The gauge has advanced 2.9 percent this week as global stocks gained nearly as fast as the losses that sent them into a bear market last week. The focus has shifted to India’s federal budget on Feb. 29, as investors seek clarity on the government’s plan to lower the corporate tax rate and phase out tax exemptions.
“Some stability in oil prices and the Chinese markets have lent a short-term respite," Vaibhav Sanghavi, managing director at Mumbai-based Ambit Investment Advisors Pvt., said in an interview. “If we see this stability continue, our markets may be poised for a pre-budget rally. We will devise our strategy after analyzing the budget.”
Oil extended gains above $31 a barrel as Iran supported a proposal by Saudi Arabia and Russia to freeze production at near-record levels, without saying whether it would curb its own output. Crude’s rally coupled with the Federal Reserve’s acknowledgment of global market swings has underpinned the recovery. The MSCI Asia Pacific Index jumped 2.2 percent.
Dr. Reddy’s jumped 4.8 percent, the most since Sept. 28. Sun Pharmaceutical Industries Ltd. climbed to the highest price since Feb. 1. Lupin Ltd. added 2.7 percent.
Larsen & Toubro added 2.4 percent, taking this week’s advance to 9 percent. Oil & Natural Gas surged 4.4 percent, the most since Aug. 28. Hero MotoCorp jumped 3.7 percent to its highest level since Jan. 4. ICICI Bank’s pared this year’s loss to 25 percent.
The Sensex has fallen 9.5 percent this year after foreign investors withdrew a net $2.4 billion from domestic stocks. They sold a net $115 million of local shares on Tuesday.