Mumbai: Indian equities climbed for an eighth day, paring a quarterly loss, as overseas funds bought the nation’s stocks for the sixth straight day and a US jobs report increased confidence in the world’s largest economy.
DLF Ltd, the biggest developer, climbed to a three-month high after Daiwa Securities Capital Markets Co. asked investors to “buy”, saying rising salaries and an increase in hiring in India are driving lease and home sales. Tata Consultancy Services Ltd (TCS), the biggest software services exporter, rose 2.8%. Foreigners have placed a net $1.3 billion (Rs5,811 crore) in Indian equities in March, after selling a combined $2.2 billion in January and February, data from the regulator show.
“There is renewed interest from foreign institutional investors, who have turned net buyers,” said Anita Gandhi, director at Arihant Capital Market Ltd in Mumbai. “Moderate interest rate increases and the cooling off in inflation is driving investor interest.” She favours shares of Bank of Baroda, Bajaj Auto Ltd, the second largest motorcycle maker and TCS.
The Bombay Stock Exchange (BSE) sensitive index, or Sensex, gained 155.04 points, or 0.8%, to 19,445.22. The eight-day advance is the longest stretch of gains since 15 April, 2009. The S&P CNX Nifty on the National Stock Exchange climbed 0.8% to 5,833.75, while its April futures traded at 5,869. The BSE-200 Index increased 0.5% to 2,378.69.
DLF advanced 1.58% to Rs 267.20, its highest level since 7 January. Its April futures settled at Rs 270.05. Bajaj Auto surged 2.9% to Rs 1,459.80, its highest close since 3 January.
Asian stocks rose on Thursday, with the benchmark regional index erasing losses since the 11 March earthquake in Japan, as a jobs report boosted optimism in the US economy and Chinese companies posted earnings that beat analyst estimates.
TCS increased 2.71% to Rs 1,182.50, while nearest rival Infosys Technologies Ltd rose 2.2% to Rs 3,236.75. Both companies get more than 90% of their sales from outside India.
The Sensex jumped 5.2% last week and has rallied 9.1% in March, the biggest monthly gain since September. The gauge had its first quarterly decline in nine as concerns that rising borrowing costs will crimp economic expansion and corporate profits dragged stocks lower in January and February. The loss is the first since a 25% slump in the fourth quarter of 2008, when the credit crisis caused the collapse of Lehman Brothers Holdings Inc. in September that year.
The quarterly slide is also the first since Prime Minister Manmohan Singh in May 2009 led the Congress party to its biggest electoral victory in two decades, pledging to cut a fiscal deficit and boost economic growth.
Companies on the benchmark trade at an average 18.3 times estimated earnings, compared with 21.5 times in March 2010, according to data compiled by Bloomberg.
Reliance Communications Ltd, the nation’s second largest mobile phone operator, lost 26% of its market value in the quarter ending on Thursday. The stock, the worst performer on the 30-member Sensex, declined 2% on Thursday to Rs 107.70, while its April futures settled at Rs 108.75.
Hero Honda Motors Ltd plunged 20% in the quarter, the second worst performance on the Sensex. The shares climbed 2.23% on Thursday to Rs 1,586.55, while the April futures settled at Rs 1,599.
Overseas investors bought a net Rs 1,500 crore ($336 million) of Indian stocks on 29 March, reducing their outflow from equities this year to Rs 3,540 crore, according to the website of the Securities and Exchange Board of India.