India Sensex Advances on Lower Oil Price; Reliance Paces Gain
(Bloomberg) -- India stocks gained on investor optimism that the falling price of crude oil, the nation’s biggest import, will help companies maintain earnings growth by keeping inflation in check.
The benchmark S&P BSE Sensex index climbed 1 percent to 35,144.49 in Mumbai, reversing a drop of as much as 0.4 percent. Reliance Industries Ltd., the country’s second largest company by market capitalization, gave the biggest boost to the gauge.
“Declining oil prices will add to the attractiveness of the oil marketing companies that have sharply corrected,” said Ritesh Ashar, chief strategy officer at Mumbai-based KIFS Trade Capital Pvt. “Allied sectors, like the paint industry, that use crude as a major input also stand to gain.”
Oil extended its longest losing streak on record after U.S President Donald Trump criticized a Saudi Arabia plan to cut output. Markets are likely to remain volatile as traders assess the outcome of elections in Indian states through the end of the year to gauge the nation’s mood ahead of a national ballot next year.
Of the 47 NSE Nifty 50 Index companies that have announced results so far, 25 have either met or exceeded profit estimates. Sixteen of the 19 sub-indexes compiled by BSE Ltd. advanced, led by a gauge of energy companies that rose after Brent prices dropped below $70 a barrel. India’s inflation eased more than estimated, a report yesterday showed, and was inline with the central bank’s forecast that price pressures will ease in the second half of fiscal 2019.
©2018 Bloomberg L.P.