India’s benchmark stock index posted its biggest jump in a month amid optimism over the progress of economic bills in parliament and as global equities climbed on speculation the Federal Reserve may raise interest rates gradually.
Bajaj Auto Ltd and Hero MotoCorp Ltd, the biggest two-wheeler makers, were among the biggest gainers on the S&P BSE Sensex. ICICI Bank Ltd and Axis Bank Ltd rose at least 3%. Housing Development Finance Corp. Ltd, India’s largest mortgage lender, rallied to a four-month high. NTPC Ltd, the largest power utility, jumped the most in a month.
The Sensex increased 1.82%, or 460.36 points, to 25,688.86 at the close, the best performance in Asia. Productivity of both houses of Parliament has been the highest in a year, according to data from PRS Legislative Research. The lower house last week approved a bill that looks to overhaul century-old bankruptcy laws and make it easier to wind up a dying company or recover dues from a defaulter.
The Nifty 50 closed 1.71%, or 132.60 points, higher at 7,866.05.
“Interest-rate sensitives are rallying on expectation that the bankruptcy bill will be passed as a money bill in parliament, which will enable banks to reduce bad debts,” A.K. Prabhakar, the head of research at IDBI Capital Capital Market Services Ltd, said by phone from Mumbai. “Also, company earnings are showing a marked improvement in net interest margins across the board.”
Earnings in the world’s fastest-growing major economy seem to be recovering after the worst run since the global financial crisis. Seven out of 12 Sensex firms that have posted March quarter results so far beat or matched estimates.
Hindustan Unilever Ltd (HUL), the biggest home-products company, reported a quarterly profit of Rs.1,090 crore, higher than the Rs.1,030 crore estimate of 22 analysts in a Bloomberg News survey. Still, the stock declined 0.9% after the company’s sales of Rs.7,810 crore rupees, less than the Rs.7,990 crore rupee estimate.
European and Asian stocks rose after disappointing US payrolls data added fuel to the argument against a Federal Reserve interest rate increase in June.
“The US non-farm payrolls data suggest that the Fed is unlikely to raise rates anytime soon,” Abhimanyu Sofat, founder at AdviseSure Ventures Pvt. Ltd in Mumbai, said by phone. “The earnings season has been better than expected and a good monsoon can trigger further rate cuts in India.”
The Sensex has lost 1.6% this year and trades at 15.9 times 12-month projected earnings versus 11.3 for the MSCI Emerging Markets Index. Foreign investors sold $49.3 million of local stocks on May 5, paring this year’s inflows to $1.7 billion. They invested $585 million last month after an inflow of $4.1 billion in March, which was the highest in three years.
Source: http://www.livemint.com
Bajaj Auto Ltd and Hero MotoCorp Ltd, the biggest two-wheeler makers, were among the biggest gainers on the S&P BSE Sensex. ICICI Bank Ltd and Axis Bank Ltd rose at least 3%. Housing Development Finance Corp. Ltd, India’s largest mortgage lender, rallied to a four-month high. NTPC Ltd, the largest power utility, jumped the most in a month.
The Sensex increased 1.82%, or 460.36 points, to 25,688.86 at the close, the best performance in Asia. Productivity of both houses of Parliament has been the highest in a year, according to data from PRS Legislative Research. The lower house last week approved a bill that looks to overhaul century-old bankruptcy laws and make it easier to wind up a dying company or recover dues from a defaulter.
The Nifty 50 closed 1.71%, or 132.60 points, higher at 7,866.05.
“Interest-rate sensitives are rallying on expectation that the bankruptcy bill will be passed as a money bill in parliament, which will enable banks to reduce bad debts,” A.K. Prabhakar, the head of research at IDBI Capital Capital Market Services Ltd, said by phone from Mumbai. “Also, company earnings are showing a marked improvement in net interest margins across the board.”
Earnings in the world’s fastest-growing major economy seem to be recovering after the worst run since the global financial crisis. Seven out of 12 Sensex firms that have posted March quarter results so far beat or matched estimates.
Hindustan Unilever Ltd (HUL), the biggest home-products company, reported a quarterly profit of Rs.1,090 crore, higher than the Rs.1,030 crore estimate of 22 analysts in a Bloomberg News survey. Still, the stock declined 0.9% after the company’s sales of Rs.7,810 crore rupees, less than the Rs.7,990 crore rupee estimate.
European and Asian stocks rose after disappointing US payrolls data added fuel to the argument against a Federal Reserve interest rate increase in June.
“The US non-farm payrolls data suggest that the Fed is unlikely to raise rates anytime soon,” Abhimanyu Sofat, founder at AdviseSure Ventures Pvt. Ltd in Mumbai, said by phone. “The earnings season has been better than expected and a good monsoon can trigger further rate cuts in India.”
The Sensex has lost 1.6% this year and trades at 15.9 times 12-month projected earnings versus 11.3 for the MSCI Emerging Markets Index. Foreign investors sold $49.3 million of local stocks on May 5, paring this year’s inflows to $1.7 billion. They invested $585 million last month after an inflow of $4.1 billion in March, which was the highest in three years.
Source: http://www.livemint.com
