Mumbai: The BSE Sensex and Nifty rose on Monday to their highest close since July 2011 as construction and other infrastructure-related stocks such as IVRCL Ltd rose on expectations the government would continue to promote projects in the sector.
Auto makers gained, as well, after posting sturdier-than-expected September sales, while software services exporters such as Infosys recovered from recent falls.
Data showing the current account deficit in the April-June quarter narrowed from a record in the previous quarter also boosted sentiment, especially as the report on Friday also showed a steep fall in gold imports.
Investors will now be on the lookout for additional action from the government, after a slew of reforms last month sparked a rally in stock markets.
India could consider amending controversial rules on tax avoidance for foreign investors in 20 days, the finance minister said on Monday, potentially ending months of uncertainty that had hurt confidence.
“Markets are positively poised in the near-term as sentiment in the market and corporates has suddenly improved. Incremental growth depends a lot on confidence, too,” said Sandip Sabharwal, chief executive officer of portfolio management services at Prabhudas Lilladher Pvt. Ltd.
“Events that can create volatility would largely be from euro zone.”
India’s benchmark BSE index, Sensex, rose 0.33%, or 61.17 points, to end at 18,823.91, marking its highest close since 25 July 2011.
The 50-share NSE index gained 0.27%, or 15.50 points, to 5,718.80 points, marking its highest close since 7 July 2011.
Infrastructure-related stocks gained after the finance minister said India will allow insurance companies to invest in projects, which may help meet big funding requirements in the sector.
The government this year has announced a number of measures, including road projects and cutting taxes on overseas borrowing, that should help the infrastructure sector.
Cement makers continued to rally, with some stocks hitting record highs, helped as well by expectations for increased construction activity after the monsoon season ended on Sunday.
Ambuja Cements Ltd gained 3.91%, having hit a record at Rs.209.85.
Select auto stocks rose after posting sturdier September sales than expected. Maruti Suzuki India Ltd rose 0.53% after saying volumes rose 9.8%, while TVS Motor Co. Ltd gained 4.26% after sales fell less than expected.
Software services exporters recovered from recent falls: Infosys Ltd gained 2.96% after falling 2.5% over the previous four sessions
Steel Authority of India Ltd rose 0.94% after JPMorgan Chase and Co. upgraded the stock to “overweight” from “neutral”, citing near-term improvement in the Asian steel outlook and a decline in coking coal prices, among other factors.
However, shares in air conditioner maker Voltas Ltd fell for the third day, ending down 2.05%, on continued concerns about declining margins.
Markets will be shut on Tuesday for a public holiday to celebrate Mahatma Gandhi’s birthday. Reuters