India’s Sensex Rises With Asian Shares as Brexit Concern Eases

  • DLF, Unitech lead developers higher before Sebi board meeting
  • A gauge of volatility drops from highest level in two months

Indian stocks rose, helping the benchmark index almost erase its weekly drop, as financial and real estate shares climbed and speculation grew that the U.K. won’t vote to leave the European Union.

The S&P BSE Sensex advanced 0.4 percent to 26,625.91 at the close in Mumbai, trimming its decline from June 10 to less than 0.1 percent. Local equities tracked gains in Asia as the killing of a U.K. lawmaker on Thursday fueled speculation that Britons could be more inclined to vote to stay in the EU in the June 23 referendum. The India NSE Volatility Index, a measure of protection against stock-market swings, fell from a two-month high.

Anxiety stemming from a so-called Brexit curbed demand for riskier assets, wiping more than $2 trillion from the value of global stocks over the past week or so. Campaigning for the referendum was suspended for a second day on Friday after the murder of Labour Party lawmaker Jo Cox.

“The markets will track their global peers until the Brexit event gets out of the way," said Chokkalingam G., managing director at Equinomics Research & Advisory Pvt. in Mumbai. “We expect volatility to rise."

The Sensex has surged 16 percent since hitting a 21-month low in February and is up 2 percent in 2016 as forecasts for the strongest monsoon in two decades and India’s world-beating economic growth lured $2.8 billion in inflows from foreign funds this year.

Tata Motors Ltd., the owner of Jaguar Land Rover, rose 2.2 percent in a fourth day of gains. Bharti Airtel Ltd., India’s largest mobile-phone operator, rallied 3 percent, the most since June 1. Coal India Ltd., the world’s largest miner of the fuel, advanced 1.8 percent. Tata Consultancy Services Ltd., the nation’s largest software services exporter that gets a quarter of its revenue from Europe, added 1.7 percent, the most since June 1.

Monsoon Progress

Investors are closely watching the progress of the June-September monsoon season, which accounts for more than 70 percent of the nation’s annual rainfall. The showers were 25 percent below normal as of Thursday, the weather department said. The government is counting on above-normal precipitation to control food prices, boost farm output and ease a water shortage caused by back-to-back droughts.

“You have to keep your fingers crossed because the stakes are too high this time when it comes to the monsoon," Sachin Shah, a fund manager at Emkay Global Financial Services Ltd. in Mumbai, said in an interview with Bloomberg TV India.

Housing Development Finance Corp. climbed 2.2 percent, making it the second-best performer on the Sensex after Bharti. The country’s largest mortgage lender is in talks with the Max Group to merge their life insurance units, people with knowledge of the matter said. Max Financial Services Ltd. surged 11 percent, the most since June 2009.

Shares of real-estate developers rallied before a meeting of the capital markets regulator. DLF Ltd., the biggest, jumped 2.7 percent, while Unitech Ltd. soared 15 percent. Sobha Ltd. rallied 4.4 percent to its highest level since Dec. 28. The S&P BSE India Realty Index surged 3.5 percent to its highest in more than 12 months. It was best performer Friday among sectoral indexes tracked by the BSE.

The Securities and Exchange Board of India’s meeting can be a “booster shot for realty companies where the regulator may possibly allow Real Estate Investment Trusts, or REITs, to invest 20 percent in projects under construction," said Suniil Pachisia, vice president at Pratibhuti Viniyog Ltd. in Mumbai. “This can be a game changer and an attractive opportunity for reviving the sector."

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