Software exporters, automakers power India stocks to record highs
MUMBAI (NewsRise) -- Indian shares edged higher to yet another record level on Tuesday, helped by extended gains in technology stocks and automakers ahead of the June quarterly earnings.
The benchmark BSE Sensex gained 0.10%, or 31.45 points, to close at 31,747.09. The broader NSE index added 0.15%, or 15 points, at 9,786.05.
Most other Asian markets also advanced, with technology stocks lifting the Nikkei Asia300 Index 1.1% after the Nasdaq Composite gained for a second day overnight. Markets await Federal Reserve Chair Janet Yellen's congressional testimony on Wednesday and Thursday for further cues about the pace and timing of rate increases in the world's largest economy.
"The Fed has already announced it will have three rate hikes this year and the markets have already factored that in. Plus, India's growth story is backed by fundamentals," said Swapneel Mantri, a technical analyst at Sushil Finance. "Most Indian technology stocks did not participate in recent rallies, so we're seeing them rise now, and there is further room for them to go up."
Indian shares have been among the best performers in the region so far this year, with the Sensex having risen more than 19% year-to-date. Mantri expects the markets to see a "sideways movement" during the second half, with subdued gains of about 5% to 9% till December.
Fifteen of the 30 Sensex constituents ended higher on Tuesday, while overall declining issues outnumbered advancing ones 1,596 to 1,135 while 147 remained unchanged.
Mahindra & Mahindra added 1.8% to 1,391.85 rupees on Tuesday. The sport-utility vehicle maker, which also manufactures a chunk of India's tractors, stands to benefit from an uptick in rural demand amid a normal monsoon. India's south-west monsoon rains so far this year have been 5% above normal, the weather office said last week.
Tata Motors, India's biggest truck maker, advanced 2.3%, adding to Monday's 2.3% advance. The Society of Indian Automobile Manufacturers Monday said lower inflation and pent-up demand will support consumption in the current fiscal year.
Lupin slid 0.9% to 1,139.35 rupees. CLSA cut the drug maker's target price to 1,310 rupees from 1,350 rupees earlier, but retained its outperform rating.
India's second-largest airline Jet Airways ended 0.1% lower. Global carriers Lufthansa and KLM-Air France and at least three private equity firms have joined a race with U.S.-listed Delta Air Lines to buy a 24% stake in Jet for $200 million to $250 million, Economic Times reported, citing people it didn't identify.
SpiceJet slid 3.3%. The budget airline's former promoter Sun Group's Kalanithi Maran is seeking more than 20 billion rupees ($310 million) as compensation from the company for the losses caused by the failure to honor contractual obligations, Economic Times reported.
Reliance Industries rose 0.2% to 1,495.20 rupees. The company's telecommunications unit Jio has tweaked its prepaid plans, reducing validity on some of them, according to the company's website. J.P. Morgan said Reliance Industries stock pricing is in positive equity value of $4.3-$5.8 billion for its telecom business Reliance Jio and rated the stock as `neutral' with a target price of 1,310 rupees.
Tata Steel declined 0.4% to 557.05 rupees. Tata Steel's U.K. unit announced that it signed a definitive sale agreement with Liberty House to sell its pipe mills in Hartlepool.
IndusInd Bank ended little changed at 1,559.25 rupees after the private lender reported a 27% on-year increase in first-quarter net profit, meeting analyst estimates.
Indian Oil Corp. rose 1.2%. The company and LanzaTech, a carbon recycling company, have signed a statement of intent to construct the world's first refinery off gas-to-bioethanol production facility in India, according to a report in the Economic Times.
--Dhanya Ann Thoppil