Mumbai: India’s stocks rose after the nation’s two biggest lenders reported third-quarter earnings that beat estimates, and as Deutsche Bank AG predicted the benchmark index will rebound this year.
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State Bank of India, the nation’s biggest lender, gained the most in almost two months after its net income rose 14% to Rs2,830 crore ($620 million) in the three months ended 31 December, better than the Rs2,700 crore average of 29 estimates compiled by Bloomberg News.
Nearest rival ICICI Bank Ltd. climbed as profit rose to a record. Deutsche Bank strategists, including Abhay Laijawala, said they remain convinced about the long-term India investment story, and predicted the Bombay Stock Exchange’s sensitive index will rise to 21,000 points by December.
The Sensex gained 143.75 points, or 0.8%, to 19,151.28 points at close in Mumbai.
The gauge earlier this month dropped more than 10% below the 5 November record, a slump that signified a so-called correction to some investors and analysts, amid concern rising prices will prompt the central bank to raise interest rates at a meeting on Tuesday.
“It’s an earnings game now,” said Arun Kejriwal, a director at Kejriwal Research and Investment Services Pvt. Ltd in Mumbai. “Investors are aligning their portfolios according to the profit reports. They would like the uncertainty over the interest rates to end tomorrow before they make fresh calls.”
Companies on the Sensex are valued at an average 18.1 times estimated earnings, down from last year’s high of 21.5 times in March, according to data compiled by Bloomberg.
The S&P CNX Nifty Index on the National Stock Exchange rose 0.8% to 5,743.25 points. The BSE 200 Index also increased 0.8% to 2,373.85.
State Bank climbed 3.8% to Rs2,695.05, its steepest one-day climb since 30 November.
ICICI Bank added 1.7% to Rs1,083.9 after announcing that third-quarter profit rose 31% to Rs1,440 crore, surpassing the Rs1,370 crore average of 29 estimates compiled by Bloomberg.
Housing Development Finance Corp., the biggest mortgage lender, rallied 2.8% to Rs669.45.
HDFC Bank Ltd, the third-biggest lender, rallied 2.6%t to Rs2,148.6. Axis Bank Ltd, the fourth-largest lender by market value, jumped 3% to Rs1,325.75.
Maruti Suzuki India Ltd, the biggest carmaker, surged 3.5% to Rs1,292.5 after raising prices of its car models by as much as 2.3% with effect from 17 January.
Reliance Industries Ltd, the nation’s most valuable company, declined 1.5% to Rs971.6.
Its net income rose 28% to Rs5,140 crore, short of the Rs5,210 crore average of 17 analyst estimates compiled by Bloomberg.
Wipro Ltd., the third-biggest software services provider, extended its 4.5% fall on 21 January, declining 2.6% to Rs443.9.
Wipro’s third-quarter revenue increased 12% to Rs7,830 crore, short of the Rs8,050 crore average of 47 analyst estimates compiled by Bloomberg.
Profit rose 10%, in line with estimates. The co-heads of the company’s main computer-services business were replaced.
Global funds sold a net Rs834 crore of Indian equities on 20 January, according to data on the website of the Securities and Exchange Board of India.
Overseas investors have sold $900 million more shares than they bought this month, heading for the first monthly outflow since May.