BackSensex rises on positive growth outlook; Hero Honda leads gains
Sensex rises on positive growth outlook; Hero Honda leads gains
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Mumbai: Indian stocks advanced after a government report forecast the economy will expand at the fastest pace in three years.
Hero Honda Motors Ltd, the biggest motorcycle maker, gained the most in seven weeks.
Also See | Optimistic Sentiment (PDF)
The nation’s $1.3 trillion (Rs59.28 trillion) economy will probably grow 8.6% in the year through March from a year earlier, the Central Statistical Organisation said on Monday.
Infosys Technologies Ltd, the second-biggest software developer, increased the most in three weeks after announcing plans to boost sales from Europe.
The Bombay Stock Exchange’s sensitive index, or Sensex, gained 29.04 points, or 0.2%, to 18,037.19 at close in Mumbai.
The gauge, the world’s worst performer this year after Egypt’s EGX30 Index, has lost 14% from a 5 November record, exceeding the 10% slump that signifies a so-called correction to some investors.
“The growth is intact and the economy is doing well," said D.K. Aggarwal, who manages about $100 million as chairman of SMC Wealth Management Services Ltd in New Delhi. “The inflation and interest rate concerns are there, but the good thing is that growth is robust. We remain bullish; plus the valuations are looking good after the fall."
The S&P CNX Nifty Index on the National Stock Exchange was little changed at 5,396. The BSE 200 Index lost 0.1% to 2,225.82 points.
Companies on the Sensex are valued at an average 17.1 times estimated earnings, down from last year’s high of 21.5 times in March, according to data compiled by Bloomberg.
Hero Honda rose 3% to Rs1,583.2, its steepest climb since 20 December. Jaiprakash Associates Ltd, a builder of dams, roads and bridges, surged 2.5% to Rs85.65. ITC Ltd, the biggest cigarette company, added 2.7% to Rs157.1.
India’s economic growth and corporate earnings lured foreign investors to buy a record $29.3 billion of local equities last year and made the Sensex the best performer and most expensive among the world’s 10 biggest markets.
DLF Ltd, the biggest developer, advanced 2.4% to Rs242.8, paring this year’s decline to 17%.
ACC Ltd, a cement maker, rose 1.5% to Rs989.25. Infosys added 1.3% to Rs3,087.45, its biggest gain since 20 January.
It aims to increase the percentage of sales it gets from Europe to 40% from 23%, Chief Executive Officer S. Gopalakrishnan said in Chennai on 4 February.
“The software stocks are looking good as the global recovery is getting stronger," said Mumbai-based Sudhir Adhlakha, vice-president at Unicon Financial Intermediaries Pvt. Ltd. “The mood is still cautious as people have burnt their fingers over the past two to three months."
Cipla Ltd, a drugmaker, sank 3% to Rs314.5 after saying third-quarter profit fell 20%.
Global funds bought a net Rs662 crore ($145 million) of Indian equities on 3 February, according to data on the website of market regulator Securities and Exchange Board of India.
Overseas investors sold $1.4 billion more shares than they have bought in January, the first monthly outflow since May.
Graphics by Yogesh Kumar/Mint
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