Indian Stocks Reverse Losses in Late Trade as Industrials Climb

  • BHEL, Hero MotoCorp help Sensex erase 0.8% intraday decline
  • Sensex set for best month since January 2012 on $2.4b inflow

Indian stocks advanced, with the benchmark gauge erasing losses in the last hour of trade, as engineering companies and automakers climbed.

Bharat Heavy Electricals Ltd., the nation’s biggest power-equipment maker, was the best performer on the S&P BSE Sensex. Larsen & Toubro Ltd. rose for a fifth day, the longest run in five months. Mahindra & Mahindra Ltd., the largest sports utility-vehicle maker, and Hero MotoCorp Ltd. increased more than 2 percent each.

The Sensex added 0.2 percent at the close in Mumbai, reversing an intraday drop of 0.8 percent. Global funds have bought $2.4 billion of shares since March 1, putting the index on course for its best month since January 2012, after Finance Minister Arun Jaitley in his Feb. 29 budget pledged to further cut the fiscal deficit and boost rural spending.

“Foreigners have been on a buying spree since the budget day and every small, intra-day fall is being bought into,” Kaushik Dani, a fund manager at Karvy Stock Broking Ltd. in Mumbai, said by phone. “There’s a lot of strength in the market.”

Rate-Cut Bets

The Sensex on Monday climbed above its 100-day moving average for the first time since October as speculation mounted that the Reserve Bank of India will lower borrowing costs after the government cut interest rates on small savings plans. The monetary authority will review its policy rates on April 5.

“A 25-basis point cut has been factored in; traders are speculating if the RBI will lower borrowing costs by 50 basis points,” said Dani. “That’s leading to buying in financials, capital goods and auto segments.”

Bharat Heavy Electricals rallied 4.2 percent to take this month’s jump to 28.5 percent, the most on the Sensex. It lost 36 percent of its value last month. Tata Steel Ltd., the biggest producer of the alloy, climbed to a 10-month high. The stock has rallied 24 percent since March 1, heading for its best month since August 2013.

Mahindra & Mahindra, India’s largest maker of sport-utility vehicles and tractors gained, 2.1 percent in a third day of advance. Hero MotoCorp, the biggest maker of motorcycles, rose 2.2 percent to its highest level since Jan. 15, 2015. Bosch Ltd., a manufacturer of automotive parts, surged to its highest level since Nov. 5.

Reliance Industries Ltd., owner of the world’s largest refining complex, capped its biggest winning run in six years after its stock-target price was increased 17 percent at Sanford C. Bernstein & Co. The shares rose 1 percent in an eighth day of gain, the longest period since March 2010.

The nation’s banks and financial markets are closed on Thursday and Friday for public holidays.

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