India Sensex Rises to Near 3-Month High on Expiry, Bank Earnings

  • Benchmark extends 3-day advance to 2.5%, most since July 13
  • Investors roll over higher number of index contracts to Feb.

Indian stocks extended their rally to third day as investors covered short positions and rolled over a higher number of index contracts to the February series. Shares of lenders and consumer durable companies paced gains.

All but seven shares on the 30-member S&P BSE Sensex Index climbed, led by mortgage lender Housing Development Finance Corp. Ltd., which advanced the most since October 2015. Wipro Ltd. dropped 1.6 percent, the most in almost three weeks, becoming the worst performer in the gauge. The company’s third-quarter net income and revenue, which it reported after market closed, beat estimates.

IndexChangeSize & Scope
BSE Sensex+1.2% Highest since Nov. 1
BSE Bankex+2.3% Highest since Nov. 11
BSE Consumer Durable+2.3% Highest since Nov. 3

The roll cost, or the price traders are paying to replace current-month futures with February securities, was at 40 basis points at 4:20 p.m. in Mumbai on expiry. That compares with a six-month mean of 51 basis points, data compiled by Bloomberg show. Investors carried over 67 percent of their January Nifty index contracts, higher than the six-month average of 56 percent.

“Markets picked clues from the better-than-estimated bank earnings today,” Sudip Bandyopadhyay, group chairman at Mumbai-based Inditrade Capital Ltd., said by phone. Investors will now look at the federal budget on Feb. 1 for “major directions.”

Earlier Wednesday, lenders such as Kotak Mahindra Bank Ltd. and Indian Bank reported third-quarter net incomes that topped estimates.

Read: Modi’s Budget Holds Key to Burnish Outlook for India Stock Flows

Overseas investors bought $101 million of local stocks in the five days through Jan. 20, first purchase after five weeks of selling.

Summary

  • Bajaj Finance +7.5%, Capital First +5.8%, Muthoot Finance +7.6% lead rally in non-bank finance companies as earnings posted by rivals show “manageable impact” from demonetization, according to Antique Stock Broking
  • Bharti Airtel Ltd. -1.6%; 3Q income, revenues miss estimates
  • Crompton Greaves Consumer +7.4% after 3Q profit beats estimate
  • Kotak Mahindra Bank +7% as 3Q net income tops estimates
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