Mumbai / Tokyo: India’s stocks rose for a fourth day as a report showed the nation’s economic growth accelerated, fanning optimism company earnings will grow and mergers and acquisitions may increase.
Mahindra and Mahindra Ltd, a vehicle and tractor maker, climbed 5.3% after saying it’s interested in bidding for South Korea’s Ssangyong Motor Co.Oil and Natural Gas Corp., the largest state-owned oil explorer, added 3.8%.
Taking stock: The Bombay Stock Exchange’s Sensitive Index has lost 3.5% this month, its first monthly drop since January. Abhijit Bhatlekar / Mint
The economy grew 8.6% in the three months ended 31 March from a year earlier, the statistics office said in a statement on Monday.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, gained 81.57, or 0.5%, to 16,944.63.
The measure lost 3.5% this month, its first monthly drop since January.
The S&P CNX Nifty index on the National Stock Exchange rose 0.4% to 5,088.80. The BSE 200 index increased 0.8% to 2,152.42.
Most Asian stocks rose, led by healthcare and consumer shares, as signs of earnings growth in the region overshadowed a credit-rating downgrade on Spain and concern China will step up measures to curb property speculation.
Astellas Pharma Inc., Japan’s No. 2 drugmaker, rose 2.3% after Mizuho Securities Co. upgraded the stock citing valuations and improving profits. Telekom Malaysia Bhd. jumped 2.8% after reporting a surge in net income. Kao Corp., which makes household products, surged 3.8% in Tokyo after Bank of America Corp.’s Merrill Lynch upgraded the stock.
China Vanke Co. sank 3%, leading declines by Chinese real-estate developers.
Two stocks rose for each one that fell in the MSCI Asia Pacific Index, which lost 0.1% to 113.31 as of 7:32pm in Tokyo. The gauge has fallen 10% in May, the most since October 2008.
The retreat in the gauge has reduced the average price of its members to 14.4 times estimated profit, down from 23 times at the beginning of 2010.
“Stocks are sufficiently cheap relative to their earnings prospects and investors see it is more likely that markets will rise than fall,” said Yoshinori Nagano, a senior strategist at Tokyo-based Daiwa Asset Management Co., which oversees the equivalent of $94 billion. “Even so, investors can’t be completely free from concern over Europe’s problems so they can’t take any bold steps.”
The Nikkei 225 Stock Average rose 0.1% in Tokyo, even as a government report showed industrial production increased 1.3% in April from a month earlier, less than economists estimated.
The Kospi index advanced 1.1% in Seoul, while the Jakarta Composite index surged 3.1%.
Malaysia’s FTSE Bursa Malaysia KLCI index increased 1.3%. Australia’s S&P/ASX 200 index fell 0.6%. China’s Shanghai Composite index slumped 2.4%.
Futures on the US Standard & Poor’s 500 Index gained 0.4% on Monday. Markets in the US and the UK were closed on Monday for national holidays.
The S&P 500 lost 1.2% on 28 May after Fitch Ratings cut Spain’s credit rating by one level to AA+ from AAA, saying the country’s debt burden is likely to weigh on growth.