BackSensex closes 59 points lower, Nifty holds 8,600; MidCap index rises to a record
Most Indian stocks climbed and an index of medium-sized companies rallied to an all-time high as foreign buying of the nation's equities accelerated
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Mumbai: Most Indian stocks climbed and an index of medium-sized companies rallied to an all-time high as foreign buying of the nation’s equities accelerated amid the longest stretch of inflows in almost three years.
Hero MotoCorp Ltd and Bajaj Auto Ltd, the biggest two-wheeler makers, were among the top gainers on the S&P BSE Sensex. Tata Steel Ltd, the biggest producer of the alloy, surged to a 18-month high, while Coal India Ltd, the world’s biggest miner of the fuel, rose the most since July. Oil and Natural Gas Corp. Ltd climbed to its highest level since January.
About 10 stocks rose for every seven that fell on the S&P BSE 100 Index at the close in Mumbai. The Sensex closed 0.21%, or 59.24 points, lower at 28,005.37, after changing directions at least 10 times. The S&P BSE MidCap index of 82 members rose 0.7% to a record and the S&P BSE SmallCap index added 0.5%. Foreign funds have been net buyers for 26 days in a row, as above-average rain after back-to-back droughts improves the outlook on company earnings and global central banks remain supportive of growth.
The Nifty 50 closed 0.21%, or 18.50 points, lower at 8,624.05.
“Given the superb rally we have seen, Indian markets are poised for a fall over any bad news," D. K. Aggarwal, chairman of SMC Investments Pvt. Ltd in New Delhi, said by phone. “We will see some consolidation here. At the same time, the inflows have been very strong. The money is now finding its way into the broader markets and that’s driving the rally in midcap stocks."
The Sensex has rallied 22% from a bear market reached in February. Twelve of the 22 companies on the index that have reported June quarter results have met investor expectations.
Indian stocks fell on Tuesday after consumer and wholesale inflation both accelerated more than estimated in July, narrowing the room for monetary easing as investors wait to see who will replace hawkish central bank governor Raghuram Rajan next month. New York US Federal Reserve president William Dudley said the central bank could potentially raise interest rates as soon as next month, warning investors that they are underestimating the likelihood of increases in borrowing costs.
Foreigners bought a net $191 million of local shares on 12 August, taking this year’s inflows to $5.6 billion, the most in Asia after Taiwan and South Korea. The Sensex is valued at 16.3 times projected 12-month profits, near the highest since April 2015. The MSCI Emerging Markets Index is valued at a multiple of 12.6. Bloomberg
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