India Stocks Rise to Highest Since February Pending RBI Decision
India Stocks Climb After Volatile Start Ahead of Monetary Policy
(Bloomberg) -- Indian stocks rose after a volatile start to the session as the central bank’s new monetary policy committee began meeting ahead of a decision later this week.
The S&P BSE Sensex advanced 0.8% to 39,878.95 in Mumbai, the highest in more than seven months, after slipping as much as 0.3% in early trade. The NSE Nifty 50 Index added 0.7%. Gains were driven by India’s most valuable company, Reliance Industries Ltd., which said it will get a $750 million investment in its retail unit.
The interest-rate decision due on Friday is likely to see borrowing costs held at a record low as inflation remains elevated, potentially benefiting lenders’ net interest margins. Meanwhile, signs of economic revival may bode well for consumer spending as India heads into its seasonal festive season.
“If we get more liquidity, whether directly or indirectly from the RBI, it could lead to a rally in financial stocks,” said Abhimanyu Sofat, head of research at IIFL Securities Ltd. in Mumbai.
The yield on the benchmark 10-year government bond fell by one basis point to 6.02%, while the rupee strengthened 0.2% to 73.3275 against the U.S. dollar.
Read: A Surprisingly Dovish RBI Could Undermine Indian Rupee
Tata Consultancy Services Ltd. is scheduled to kick off the quarterly earnings season with results later today, and investors are watching for commentary on global demand, new deals and a share buyback proposal.
Read: India’s IT Firms Set to Post Strong Earnings on Demand Revival
The Numbers
- Ten of 19 sector sub-indexes compiled by BSE Ltd. fell, while a gauge of metal producers declined the most
- Sixteen Sensex shares gained while 14 fell; Bajaj Finance Ltd. fell the most, with a 4.1% drop, and was the biggest drag on the gauge
- Reliance Industries Ltd. contributed most to the index gain with a 2.1% jump
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