The Bombay Stock Exchange, right, stands on Dalal Street. (Photographer: Vivek Prakash/Bloomberg)

India’s Sensex Struggles to Hold Near Record for Second Session

(Bloomberg) -- India’s equities benchmark struggled to hold a gain after it touched above a record high closing level amid expectations that the central bank will this week cut borrowing costs for a second time this year ahead of national elections that start next week.

The benchmark S&P BSE Sensex Index advanced 0.2 percent to 38,947 as of 9:37 a.m. in Mumbai, trading near its August 28 all-time high close for a second consecutive session. The NSE Nifty 50 Index also added 0.2 percent. India’s government is increasingly looking to the central bank to help boost a flagging economy before the national poll.

The central bank will lower its key rate at an April 4 policy meeting, according to most economists in a Bloomberg survey. Foreign investors have pumped more than $7 billion into India stocks so far this year -- among the most in Asia -- on bets that rate cuts and the prospective reelection of Prime Minister Narendra Modi’s government will support earnings growth in Asia’s third-biggest economy.

Strategist View

  • “The street has yet to play catch-up on a 20 percent CAGR in earnings growth over F19-23,” amid potential for interest rate cuts, improving credit growth and recovery in the real estate market, Abhijit Kukreja, an equity salesman at Auerbach Grayson Co., said by email from New York.
  • Foreign flows will remain strong due to regional allocations, earnings growth and a backdrop of negative returns in 2018, he said.

The Numbers

  • Thirteen of the 19 sector indexes compiled by BSE Ltd. advanced, led by a gauge of real estate stocks.
  • Twenty one of the 31 Sensex members and 28 of the 50 Nifty stocks advanced. Bharti Airtel Ltd. and technology stocks including Infosys Ltd. were among the top gainers on the benchmark gauge.
  • Eicher Motors Ltd. was the top performer on the Nifty Index, with a gain of 4.3 percent, after Vinod Dasari joined its unit Royal Enfield as chief executive officer.

Analyst Notes/Market-Related Stories

  • India to Repeat $5 Billion Forex Swap After Successful Auction
  • ICICI, Axis to Benefit as RBI Eases Rules on Divergence: ICRA
  • RBI Eases Rules Related to Disclosure of Divergences by Banks

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