Most Indian Stocks Climb as Energy Shares Gain; Drugmakers Drop

  • Fed lowers projection for interest-rate increases this year
  • Foreigners have bought shares worth $1.8 billion this month

Most Indian stocks gained, led by energy and industrial companies, after the U.S. Federal Reserve signaled a slower pace of interest-rate increases.  

Bharat Petroleum Corp. paced a rally among state-run refiners after gasoline and diesel prices were increased. GAIL India Ltd., the largest natural-gas supplier, climbed to a six-week high. Bharat Heavy Electricals Ltd., a power-equipment maker, was the top gainer on the S&P BSE Sensex. Drugmakers Lupin Ltd. and Cipla Ltd. were the worst performers.

The Sensex wiped out a 1.1 percent gain in late trade to close little changed at 24,677.37 as European equities resumed trading in the red. The Indian gauge rose to a seven-week high earlier, tracking advances in Asian equities, as the Fed pared back the number of rate increases it anticipates enacting this year. 

“We are reacting to global cues, including European equities, in the absence of domestic triggers," Vishal Thakker, a trader at Elara Capital Ltd., said by phone from Mumbai. “Nothing has changed fundamentally to justify the sharp rally.”

The Sensex has risen on all but two days in March after Finance Minister Arun Jaitley in his Feb. 29 federal budget pledged to further cut the fiscal deficit, stoking speculation of a interest-rate cut by the central bank in its April 5 policy meeting. Foreign funds bought $1.8 billion of local shares this month as risk appetite returned after global central banks indicated a willingness to continue measures to support growth and stabilize markets.

‘Still Sluggish’

Prospects for tighter U.S. policy had sparked outflows from emerging markets, dragging them lower at the start of the year. The rupee remains Asia’s worst performer this year.

“The central bank action, or inaction, was no great surprise to us looking at what’s going on in the global economy - things are still very sluggish," Hugh Young, managing director for Asia at Aberdeen Asset Management Plc., which has $428 billion in assets, said in an interview to Bloomberg TV India.

Bharat Petroleum surged 5.7 percent, the most since August 2014. Indian Oil Corp. gained 2.6 percent. Hindustan Petroleum Corp. surged 4.3 percent. Indian Oil Wednesday raised gasoline price by 3.07 rupees a liter in Delhi and diesel price by 1.90 rupees a liter.

GAIL India jumped 4 percent, while Oil & Natural Gas Corp. climbed 2.8 percent.

Bharat Heavy Electricals rallied 4.2 percent. Adani Ports & Special Economic Zone Ltd. climbed 3.1 percent to its highest level since Jan. 12.

Foreigners bought $103 million of local shares on March 16, paring this year’s outflow to $1.1 billion. The Sensex has risen 7.3 percent this month and trades at 15.1 times 12-month projected earnings. The MSCI Emerging Markets Index trades at a multiple of 11.6.

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