Most Indian Stocks Rise, Key Gauges Eke Out Gain Ahead of Budget

(Bloomberg) -- Most Indian equities advanced and key indexes eked out gains ahead of the federal budget due Friday. Investors are counting on the government to provide stimulus for an economy growing at its slowest pace in several years.

The benchmark S&P BSE Sensex added 0.1% to 39,839.25 at the 3:30 p.m. close in Mumbai, after fluctuating between a gain of as much as 0.3% and a decline of 0.2% in the day. The NSE Nifty 50 Index also rose 0.1%.

India’s benchmark index has risen more than 10% since January, among the best performers in major Asian equity markets. But the country this year lost its status as the world’s fastest growing economy to China, the unemployment rate is near a 45-year high and Prime Minister Narendra Modi’s re-elected government is under pressure to announce a stimulus package.

Strategist View

• “The market is priced reasonably, not very expensive from a one- to three-year view,” Rana Gupta, managing director of Indian equities at Manulife Asset Management Singapore Pte., said. Strong inflows from both local funds and foreigners are providing support, he said.
• Key risks to local stocks include any global event that derails capital flows to emerging markets, a rebound in oil prices and extended aftershocks from India’s credit crunch, Gupta said.

The Numbers

• Twelve of the 19 sectors tracked in the benchmark, led by a gauge of property stocks.
• Seventeen of the 31 Sensex members and 25 of the 50 Nifty stocks rallied. In the broader index of 500 top companies, 278 gained. The S&P BSE SmallCap Index climbed 0.3%, a third day of gain.

• Indiabulls Housing Finance Ltd. jumped 7.6%, the steepest among Nifty members, after it bought back 27.1 billion rupees ($393 million) of debt. Eicher Motors Ltd. dropped the most, falling 2.4%, after a two-day rally.

Analyst Notes/Market-Related Stories

• Investors Chasing Higher Returns Can’t Skip India, Manulife Says
• India’s Services Activity Contracts First Time in 13 Months

• RBI Draining Cash Dashes Hopes of More Debt Purchases in India

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