A pedestrian look towards a screen and an electronic ticker board showing stock figures outside the Bombay Stock Exchange (BSE) building in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

India Stocks Rise Ahead of Quarterly Earnings; Sun Pharma Gains

(Bloomberg) -- India stocks rose as investors positioned for the corporate earnings’ season that begins this week amid estimates that economic growth may be slower than forecast.

The S&P BSE Sensex climbed 0.4 percent to close at 35,980.93 in Mumbai after swinging between gains and losses. The broader NSE Nifty 50 Index rose 0.3 percent.

India’s largest companies this week begin reporting results for the October-December quarter, with lender IndusInd Bank Ltd. scheduled to kick the season off on Wednesday. Asia’s largest software exporter, Tata Consultancy Services Ltd., will outline its performance on Thursday, followed by Infosys Ltd. on Friday.

India’s economy will expand 7.2 percent for the twelve months through March, according to the government’s first official estimate. That would be the fastest pace in three years, but slower than the central bank’s projected growth rate of 7.4 percent.

The Numbers

  • Eleven of 19 sub-indexes compiled by BSE Ltd. gained, led by a measure of telecom companies and banks, while a gauge of utility companies dropped the most.
  • ICICI Bank Ltd. and State Bank of India Ltd. gave the biggest boosts to the benchmark index.
  • Bandhan Bank dropped as much as 4.2% while Gruh Finance plunged 16.7% after news of a merger deal
  • Sun Pharmaceutical Industries was among top performers on the Sensex after a U.S. FDA drug approval. The stock was raised to add from sell at Kotak Securities Ltd.

Strategist View

  • “Earnings growth will be necessary to take markets higher. We hope public sector undertakings’ loss-provisioning has peaked and this quarter’s earnings will provide color,” Sunil Sharma, chief investment officer Sanctum Wealth Management Pvt. wrote in a note.
  • “The domestic macro picture looks fairly good heading into 2019 for Indian equities. Emerging markets look better than developed markets, buffeted by expected strong domestic flows, low interest rates, low inflation, low crude and accommodating central bank policy,” Sharma added.

Analyst View/Note

  • Aurobindo Pharma Upgraded to Outperform at CLSA; PT 820 Rupees
  • Ambuja Cements Downgraded to Outperform at CLSA

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