BackSensex, Nifty climb to three-year highs as RBI eases liquidity curbs
Sensex closes 1.74%, or 358.73 points, higher at 20,929.01; Nifty soars 1.96%, or 119.80 points, to 6,220.90
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Mumbai: India’s benchmark stock index rose to a three-year high after the central bank took steps to boost cash supply for banks while raising key borrowing costs.
ICICI Bank Ltd jumped 6%, helping a gauge of 13 lenders climb to its highest since July. Car maker Maruti Suzuki India Ltd surged the most in 21 months after its quarterly net income almost tripled. Tata Steel Ltd, the biggest producer of the alloy, surged 4.24% to ₹ 325.65, ending a four-day slide.
The S&P BSE Sensex added 1.74%, or 358.73 points, to 20,929.01 at the close, its highest level since 9 November, 2010. The gain, which ended a five-day decline, was the most among Asian benchmark indexes. Reserve Bank of India (RBI) governor Raghuram Rajan cut the marginal standing facility (MSF) rate to 8.75% from 9%, making short-term funds cheaper for banks. The cost was raised in July in an emergency move to stem the drop in the currency.
“The liquidity boost will help support growth," Debasish Mallick, chief executive officer at IDBI Mutual Fund in Mumbai, said by telephone on Tuesday. “With the cut in the MSF rate, RBI has reversed steps it took to support the rupee."
ICICI Bank surged to its highest level since 2 July to ₹ 1,075.45. State Bank of India advanced 3.65% to ₹ 1,737.30, driving the S&P BSE Bankex index to gain 4.35% to 12,831.06, its highest close since 15 July.
Maruti, Ranbaxy
Maruti Suzuki 8.19% to ₹ 1,636.90, its highest close since 30 May. The company reported after trading ended Monday that net income almost tripled to ₹ 670 crore in the September quarter.
Tata Steel climbed the most since 18 October. Sesa Sterlite Ltd, the biggest copper producer, soared 2.66% to ₹ 200.80. Aluminum producer Hindalco Industries Ltd jumped 3% to ₹ 110.20.
Drugmaker Ranbaxy Laboratories Ltd reported an unexpected third-quarter loss of ₹ 454 crore compared with a ₹ 150 crore profit estimated by 29 analysts in a survey. The stock fell 0.82% to ₹ 385.65.
Tata Consultancy Services Ltd (TCS) shares gained 0.34% to ₹ 2,070.30, while Infosys Ltd climbed 0.19% to ₹ 3,330.30.
The Sensex has gained 7.7% this year and trades at 14.2 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.7 times. Quarterly profits at 13 of 14 companies in the Indian gauge that have posted earnings so far this season have beaten or matched estimates, data compiled by Bloomberg show. About 47% of the companies trailed forecasts in the June quarter.
Foreign investors bought a net $107 million of domestic shares on 28 October, taking this year’s inflow to $15.7 billion, data from the regulator showed on Monday. They have purchased $2.27 billion of shares this month, extending September’s $2 billion inflow.
The 50-stock CNX Nifty index soared 1.96%, or 119.80 points, to 6,220.90 points, a three-year high. The India VIX, which measures the cost of protection against losses in the Nifty, plunged 7.2% to its lowest level in more than two months. Bloomberg
Bloomberg’s Manish Modi in New Delhi and Mint’s Ravindra Sonavane contributed to this story.
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