Indian Stocks Rises to 4-Month High as Maruti, Tata Steel Rally

  • Short-covering puts Sensex within whisker of erasing 2016 loss
  • Maruti Suzuki gains after quarterly revenue exceeds estimates

Indian stocks rallied the most in two weeks as traders closed bearish bets in carmakers and metal producers before the expiry of the monthly derivatives contracts on Thursday.

Maruti Suzuki India Ltd., the maker of half the cars sold in India, was the best performer on the S&P BSE Sensex after its fourth-quarter revenue exceeded estimates. Tata Steel Ltd. surged to a one-year high and HDFC Bank Ltd. rose the most in two months. Cigarette maker ITC Ltd. rebounded from an intraday loss of as much as 2.8 percent.

The Sensex rallied 1.3 percent at the close, reclaiming the 26,000 mark for the first time since December-end. The gauge has rebounded 13 percent from a February low as global funds extended their monthly purchases of local shares. They’ve bought $364 million of stocks this month, adding to the $4.1 billion they in March, the most in three years.

“Metalsmakers and automakers are rallying on short-covering before the expiry,” A. K. Prabhakar, head of research at IDBI Capital Capital Market Services Ltd., said by phone from Mumbai. “Quarterly results of banks and automakers has been positive so far.” He’s bullish on Infosys Ltd., India’s second-biggest software maker, Ramco Cements Ltd. and lenders including Indusind Bank Ltd. and HDFC Bank Ltd.

Nifty Rollovers

Traders rolled over 48 percent of the NSE Nifty 50 Index futures contracts at 4 p.m. to the May series that starts Friday, versus a six-month mean of 57 percent, the data show. The Nifty index climbed 1.4 percent to its highest level since Jan. 1. The monthly derivatives futures expire on last Thursday of every month.

Maruti Suzuki soared 3.9 percent to its highest level since Feb. 2. Total revenue in the March-quarter climbed to 153 billion rupees ($2.3 billion), beating the 148.8-billion rupee average of 27 analysts’ estimates compiled by Bloomberg. Profit declined 12 percent to 11.3 billion rupees, versus the 11.9-billion rupee average forecast in the survey.

Axis Bank Ltd. may report later today its profit rose 7 percent to 23.3 billion rupees, according to the median estimate of 28 analysts in a Bloomberg survey. The shares increased 2.2 percent to the highest level since Nov. 16.

So far, four out of six Sensex companies that have reported March-quarter results beat or matched estimates.

Tata Steel jumped 3.2 percent to its highest level since May 11. The shares have climbed 38 percent this year and is the best performer on the Sensex.

Godfrey Phillips India Ltd., a unit of Phillip Morris International Inc., tumbled 17 percent, the most since August 1993, after a report the government may ban foreign direct investment in tobacco. ITC Ltd. climbed 2 percent after dropping as much as 2.8 percent.

Foreigners bought $36.1 million of local stocks on April 25, extending this year’s inflows to $1.6 billion. The Sensex has risen 2.6 percent this month and trades at 16 times 12-month projected earnings versus 11.8 for the MSCI Emerging Markets Index.

Before it's here, it's on the Bloomberg Terminal.