India's Equities Extend Rally as Sensex Climbs for a Second Day

(Bloomberg) -- Indian equities gained, with the benchmark index rising for a second day, extending its rebound from the worst losing streak since May 2011. Gauges of mid- and small-sized shares also advanced.

The S&P BSE Sensex climbed 0.4 percent to 35,898.35 at the close in Mumbai, after its steepest gain this month on Wednesday halted a nine-day decline. The NSE Nifty 50 Index rose 0.5 percent to 10,789.85. Both gauges ended above their 100-day moving average for a second day.

While India’s economy is expected to be among the fastest expanding among major nations and corporate earnings growth is seen recovering from multi-year lows, investors are waiting to see whether national polls expected in May deliver a government that continues with policies aimed at boosting spending and productivity.

India's Equities Extend Rally as Sensex Climbs for a Second Day

Strategist Views

  • “Positive advance-decline ratio in the broader market indicates that Indian equities are nearing a bottom,” said Rajendra Kumar Wadher, a Mumbai-based director at PRB Securities Ltd. “We expect the Nifty to touch 10,915 and 11,010 next week, but the markets will still trade in a range until the outcome of elections.”
  • “The Indian market is right now only about elections and election results,” said Vivek Ranjan Misra, head of fundamental research at Karvy Stock Broking Ltd. in Hyderabad.
    • “We see a definite direction for equities and a possible out-performance over emerging-market and global peers once this looming poll uncertainty is out of the way.”
    • “We currently favor large companies over small-sized rivals amid the uncertainty,” he said, advising investors buy shares of banks and engineering and construction companies.

The Numbers

  • Thirty-five of the 50 Nifty shares and 18 of the 31 Sensex stocks gained, while every two stocks rose for each that declined on the S&P BSE 500 Index
  • Seventeen of the 19 sector indexes compiled by BSE Ltd. advanced, led by the S&P BSE Basic Materials Index’s 1.3% gain
  • The NSE Volatility Index dropped 5.9%, extending a two-day decline to 13%
  • The S&P BSE MidCap Index gained 0.9% and the S&P BSE SmallCap Index added 1.1%
  • Corporation Bank jumped by its daily 20% limit, the most since its 1997 listing. It paced a rally of 12 state-owned lenders after India approved an additional funding plan.
  • Page Industries Ltd., the Indian franchise of Jockey International Inc.’s undergarments, gained 4% after Goldman Sachs upgraded the shares to buy
  • Reliance Nippon Life Asset Management Ltd. surged by a record 20% after parent Reliance Capital Ltd. offered venture partner Nippon Life Insurance Co. its entire remaining 42.88% stake
    • Reliance Capital jumped 11%

Analyst Notes/Market-related Stories

  • Fitch Bucks Consensus And Rules Out Easy India Mandate for Modi
  • Shree Cement Upgraded to Buy at CLSA; PT 19,000 Rupees
  • Modi’s Farm Plan is ‘Wild Card’ in Tight India Polls, UBS Says
  • Britannia Raised to Outperform at Credit Suisse; PT 3,400 Rupees

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