Mumbai: India’s benchmark stock index rose to a 25-month high after finance minister Pranab Mukherjee said the nation’s rate of economic growth is “impressive” and may accelerate to the fastest pace in three years.
Reliance Industries Ltd (RIL), India’s largest company by market value, surged to the highest in more than nine months after Nomura Holdings Inc. advised investors to buy the shares, citing an outlook for “large” earnings growth. DLF Ltd, India’s biggest developer, advanced to a two-month high.
Photo by Madhu Kapparath; graphic by Paras Jain/Mint
The rupee rose to the strongest in 19 months per dollar as overseas funds bought more of the country’s assets.
The Bombay Stock Exchange’s Sensex index gained 243.06 points, or 1.4%, to 17,935.68, the highest since 19 February 2008. The S&P CNX Nifty index of the National Stock Exchange rose 1.5% to 5,368.40. The BSE-200 index gained 1.4% to 2,247.48 points. Stock markets were closed on 2 April for a public holiday.
“Domestic consumption remains strong, which will drive our growth,” said Vaibhav Sanghavi, a director at Ambit Capital Ltd in Mumbai, who manages funds for wealthy individuals. “The economy is buoyant and strong. There is no reason why we should not be able to achieve our growth targets.” Sanghavi, who declined to disclose the value of assets he oversees, prefers shares in airlines, retailers and auto parts makers that he didn’t name.
The economy may expand by as much as 8.75% in the 12 months through March, Mukherjee had said in New Delhi on 2 April, reiterating a February forecast by his ministry. Foreign ownership of equities reached a record in dollar terms on 30 March, according to market regulator, Securities and Exchange Board of India. The rupee on Monday touched 44.50 per dollar, its highest level since 4 September 2008.
RIL climbed 3.3% to Rs1,125.90, its highest since 12 June. Investors should focus on “large” earnings growth, “significant” exploration and production upside, according to Nomura, which upgraded the stock from “neutral” on Monday.
DLF rose 4.2% to Rs322.25, the highest since 3 February. Reliance Infrastructure Ltd, the builder of a mass rapid transit system in Mumbai, jumped 5.1% to Rs1,066.55, its steepest one-day gain since 11 November.