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Business News/ Market / Stock-market-news/  Sensex marks best week in 5 months on monsoon progress
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Sensex marks best week in 5 months on monsoon progress

The Sensex rose 0.7%, or 200.34 points, to 27,316.17 on Friday, while it climbed 3.4% this past week, its best performance since 5 days through 25 Jan

Shares also rose after Federal Reserve chair Janet Yellen said she still wants to see more evidence of a lasting turnaround before raising near-zero borrowing costs. Photo: MintPremium
Shares also rose after Federal Reserve chair Janet Yellen said she still wants to see more evidence of a lasting turnaround before raising near-zero borrowing costs. Photo: Mint

Mumbai: Indian stocks climbed for a sixth day, with the benchmark gauge ending three weeks of losses, as better- than-forecast rains eased concern about the central bank’s ability to lower interest rates.

Mahindra and Mahindra Ltd (M&M), the largest tractor maker, rose the most in three weeks amid speculation above-normal rainfall will boost farm incomes. Housing Development Finance Corp., the nation’s biggest mortgage lender, climbed for a third day, and Reliance Industries Ltd (RIL), owner of the world’s largest refining complex, completed its best week in six years.

The S&P BSE Sensex advanced 0.7%, or 200.34 points, to 27,316.17 at the close Friday. The gauge climbed 3.4% this past week, its best performance since the five days through 25 January, as the progress of the monsoon spurred optimism food costs won’t spike and cap the central bank’s scope to cut interest rates. Shares also rose after Federal Reserve chair Janet Yellen said she still wants to see more evidence of a lasting turnaround before raising near-zero borrowing costs.

“The monsoon was clouding the outlook, but the big, dark clouds now have a silver lining," P. Phani Sekhar, a fund manager at Karvy Stock Broking Ltd in Mumbai, said by phone. “The Fed commentary too has been more benign than expected."

Trading volumes were as much as 22% below the 30-day average after a decade-high amount of daily rainfall in June forced Mumbai’s commuter trains to halt. The downpour affected all the three train networks that carry as many as 8 million people every day, including traders in the financial markets.

Mahindra and Mahindra, ITC

Almost 80% of India has received excess or normal rain since 1 June, defying forecasts by the weather bureau that El Nino would curb rainfall. Mumbai is likely to get heavy rains in the next 24 hours, the state-owned agency said Friday.

The June-September monsoon rains help water more than half of India’s farmland, where sowing begins in June.

M&M increased 4.53% to its highest close since 28 January. ITC Ltd, the biggest cigarette company, capped its sixth day of gain, the longest run since November.

Housing Development Finance Corp Ltd climbed 1.8%. RIL added 1.8%, taking the week’s rally to 12%, the most since March 2009.

International investors sold a net $130 million of Indian stocks on Wednesday, 17 June, paring this year’s inflows to $6.4 billion.

The Sensex has dropped 0.7% this year and trades at 15.2 times projected 12-month profits, versus the five-year average of 14.4. The MSCI Emerging Markets Index is valued at a multiple of 12, data compiled by Bloomberg show.

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Published: 19 Jun 2015, 04:41 PM IST
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