Indian Shares Reach New Record, Boosted by Property Stock Rally

(Bloomberg) -- Indian shares touched a new high a day before the central bank’s monetary policy meeting, boosted by a rally in property developers. The benchmark Sensex and the NSE Nifty 50 indexes, which reopened after a holiday, extended Monday’s record levels.

The Sensex climbed 0.2 percent and the Nifty gained 0.3 percent at the close in Mumbai, while an index of 85 mid-sized companies posted a fifth straight all-time high.

Adani Ports & Special Economic Zone Ltd. rallied 4.7 percent to its highest close since August 2015, as it considers building a port in Malaysia. Mortgage lender Housing Development Finance Corp. dropped 2.8 percent after saying profit on investments sale will be 490 million rupees in the January-March quarter compared with 15.2 billion a year earlier.

Ten of the 13 sector gauges compiled by BSE Ltd. rose, paced by the S&P BSE Realty Index. The measure of 10 property developers jumped 4.1 percent to its highest level since April 2015. Sobha Ltd. led gains, surging 17 percent. The company posted its steepest gain in a day since November 2009 after an exchange filing showed its revenue in the quarter ended March rose 35 percent from the previous three months.

“Sobha’s fourth-quarter numbers indicate that the impact of demonetization on the property sector is less than what was feared,” said Raghvendra Kedia, partner, trading group at Mumbai-based MH Capital Services Pvt. The impressive operational performance “has lifted” the realty stocks up today, he said.

Despite key Indian equity benchmarks at new peaks, some strategists see more room for gains amid a revival in inflows from overseas investors, along with local fund purchases. CLSA India Pvt. raised Nifty’s target for March 2018 by 3 percent to 10,000 and said that lower equity supply and “large investor flows” will keep valuations elevated, according to an April 3 note.

Investors now await the outcome of the Reserve Bank of India’s monetary policy meeting on Thursday. All the 50 economists surveyed in a Bloomberg poll predict that the central bank will keep the key repurchase rate unchanged at 6.25 percent.

“After the RBI changed its stance from accommodative to neutral in its previous policy meeting, investors will be closely watching the commentary tomorrow,” said Hyderabad-based Jagannadham Thunuguntla, head of fundamental equity research at Karvy Stock Broking Ltd.

Overseas investors bought $6.7 billion of local stocks in the first quarter, the highest among major Asian markets. The purchases follow a record $4.6 billion quarterly outflow in the October-December period, according to data compiled by Bloomberg.

Summary

• KEC International (KECI) +4.5%, rises to record after getting 17.8b rupees of orders
• Cyient (CYL) +4.1%; raised to outperform from underperform at Morgan Stanley
• Indiabulls Ventures (IBVE) +5%; rises to highest since Sept. 2008; board meets April 7 to consider share sale to foreign investors
• Titan (TTAN) +7.1%, jumps to record as revenue growth forecast tops estimates
• Shankara Building (SHANKARA) jumps 37% above IPO price in trading debut

To contact the reporter on this story: Ameya Karve in Mumbai at akarve@bloomberg.net.

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Ravil Shirodkar, Namitha Jagadeesh