Sensex climbs 41 points as fund flows turn positive
Wipro climbs to a 14-year high; Bhel rises to a 3-week high; L&T rallies to a 2-month high; Nifty regains 6,200 level
Mumbai: Indian stocks gained for a third day after net foreign inflows into the nation’s shares turned positive for this year. Software makers and industrials rose.
Wipro Ltd climbed to a 14-year high, sending a measure of technology companies to a one-month high. Power-equipment maker Bharat Heavy Electricals Ltd (Bhel) rose to a three-week high, while engineering company Larsen and Toubro Ltd (L&T) rallied to a two-month high. Bharti Airtel Ltd increased the most in three weeks.
The S&P BSE Sensex added 0.2%, or 41.03 points, to 20,852.47 at the close, after changing direction at least 15 times before the expiry of monthly derivatives contracts on Wednesday. Foreigners bought $45.3 million of local shares on Monday, turning this year’s net flows positive for the first time since 30 January, data compiled by Bloomberg show. The Sensex posted its biggest weekly advance in two months last week after finance minister P. Chidambaram pledged to narrow the fiscal gap to a seven-year low and highlighted diminishing price pressures.
“Foreigners are becoming positive due to improvement in India’s macro-economic data," Jagannadham Thunuguntla, chief strategist at SMC Global Securities Ltd, said by phone from New Delhi. “The outlook for growth is improving and inflation is expected to come down further."
Gains in the consumer-price index eased to the slowest pace since January 2012 and the Wholesale Price Index fell to a eight-month low, official data released this month show. Asia’s third-largest economy will expand 4.9% in the 12 months through 31 March, faster than the decade-low growth of 4.5% last year, the statistics ministry said 7 February.
Wipro rose to highest level since March 2000, while Tata Consultancy Services Ltd, India’s largest software exporter, increased 0.5%. Bhel increased 2% and L&T climbed to the highest close since 18 December. The stocks were among the top 10 gainers on the Sensex on Tuesday.
Bharti Airtel added 1.6%, ending a three-day, 6.5% decline. The stock’s 14-day relative strength index was 27.8 on Monday, below the 30 level that some traders take as a sign an asset is oversold.
The CNX Nifty Index gained 0.23%, or 13.95 points, to 6,200.05, the highest level since 24 January. The India VIX Index fell to a 10-month low a day ahead of the launch of futures contracts on the nation’s benchmark gauge for stock volatility.
The Sensex has retreated 1.5% this year and trades at 13.4 times projected 12-month earnings, compared with the average multiple of 14.5 over the past five years. The MSCI Emerging Markets Index is valued at 10.2 times. Bloomberg
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