Sensex Completes Third Week of Gains as Investors Weigh Outlook
People walk through a metal detector at a security check-point at the Bombay Stock Exchange (BSE) building in Mumbai, India. (Photographer: Kanishka Sonthalia/Bloomberg)

Sensex Completes Third Week of Gains as Investors Weigh Outlook

(Bloomberg) -- India stocks advanced, with the benchmark index completing its third week of gains, on investor expectation that lower borrowing costs will boost the outlook for corporate profits.

Global sentiment for riskier assets was also buoyed by renewed U.S.-China trade-deal prospects.

The S&P BSE Sensex advanced 0.2% to 40,356.69 in Mumbai, clocking its longest weekly winning streak since the end of September. The measure had climbed as much as 0.9% earlier in the session before a late sell off.

The NSE Nifty 50 Index added 0.2%. Most markets in Asia rose as optimism grew for Beijing and Washington to close an initial trade deal, with the MSCI Asia Pacific Index climbing 0.5%.

Locally, earnings for companies were better than expected. Thirty-one of the Nifty 50 firms either met or exceeded analyst estimates, while results for six were incomparable, according to data compiled by Bloomberg. Investors in India yesterday shrugged off quickening inflation in the expectation that borrowing costs will continue to be eased.

Strategist View

“With earnings over, investors will focus on economic growth data due later in the month to gauge the central bank’s stance on reducing interest rates further,” said Vineeta Sharma, head of research at Narnolia Financial Advisors Ltd. “We advise buying corporate banks and select consumer stocks.”

The Numbers

  • Seven of 19 sector sub-indexes compiled by BSE Ltd. advanced, led by a gauge of telecom companies
  • Telecom services providers surged amid expectations that government may provide moratorium to companies on the pending spectrum payments
  • Gauge of banking stocks added 0.9% after the Supreme Court allowed ArcelorMittal to acquire Essar Steel, and ruled that the steelmaker’s financial lenders get preference over operational creditors such as suppliers
  • Fortis Healthcare Ltd plunged 7.9% after the top court refused to remove a barrier for its takeover by Malaysian operator IHH Healthcare Bhd
  • SBI contributed the most to the Sensex advance, increasing 5.2% while Bharti Airtel had the largest gain, rising 8.4%
  • ITC Ltd was the biggest drag on the benchmark index, declining 1.3% while Hero MotoCorp had the biggest drop, falling 1.9%

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