Indian Stocks Rise to Record for Third Day, Led by Energy Shares

  • Nifty 50 Index touched new high on ‘short covering’: Edelweiss
  • S&P BSE Oil & Gas Index advances most among 13 sector gauges

India’s main stock indexes capped a third day of record highs, paced by a rally in energy shares. A gauge of mid-cap stocks also climbed to an all-time level.

The benchmark S&P BSE Sensex gained 0.2 percent to 31,804.82 at the 3:30 p.m. close in Mumbai, while the NSE Nifty 50 Index rose 0.3 percent. The Nifty’s recent rally was “on short covering,” Edelweiss Broking Ltd. said in an investor note, referring to when traders reverse bearish short sales. The gauge is headed for 10,000 after it broke its one-month resistance level of 9,700, Edelweiss said.

Eleven of the 13 sector indexes compiled by BSE Ltd. advanced, paced by the S&P BSE India Oil & Gas Index’s 1.5 percent increase. Oil futures traded in New York extended gains above $45 a barrel as U.S. industry data showed crude and gasoline stockpiles declined. The S&P BSE MidCap Index, a gauge of 84 companies, climbed 1.1 percent.

The Sensex now trades at a nearly 10-year high valuation of 18.4 times its estimated 12-month earnings amid the best rally among major Asian markets this year. “If earnings start growing at 15 to 20 percent, we can see these valuations sustaining,” Sampath Reddy, chief investment officer at Bajaj Allianz Life Insurance Co., said in a recent interview.

Read Bajaj Allianz views on equities

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