Indian travel-related companies rose, led by Cox & Kings (COXK) Ltd., after Prime Minister Narendra Modi eased visa rules for U.S. tourists.
Mumbai-based Cox & Kings rallied the most in more than two months. Thomas Cook (India) Ltd. advanced for the first time in six days. Indian Hotels Co., owner of the Taj brand of luxury hotels, halted a three-day decline. The S&P BSE Sensex (SENSEX) added 0.2 percent to 26,667.82 at 1:01 p.m. in Mumbai after changing direction at least 10 times. A gauge of medium-sized companies advanced 1.1 percent.
U.S. tourists to India will be issued a visa on arrival and identification documents for non-resident Indians will be merged into a single category, Modi said at an event at Madison Square Garden in New York city yesterday. The rule changes will be implemented very soon, he said. Modi will be hosted by President Barack Obama at the White House today and tomorrow.
“Investors expect more tourists to come after yesterday’s announcement,” Alex Mathews, head of research with Geojit BNP Paribas Financial Services Ltd., said by phone today. “Easing of rules for Indians living abroad may also lead to more travel activities.”
A person of Indian origin will get a lifelong visa for India, Modi said. The so-called PIO card will eventually be combined with the Overseas Citizen of India or OCI document, removing differences between the way groups of non-resident Indians were categorized and issued visas, he said to 20,000 mostly Indian Americans present at the event.
Cox & Kings jumped 8.2 percent, the most since July 15, rebounding from last week’s 9.4 percent decline. Thomas Cook gained 7.5 percent, the steepest gain since Aug. 1. The stock tumbled 13 percent last week, the sharpest weekly loss since the period ended Feb. 16.
Sterling Holiday Resorts (India) Ltd., a unit of Thomas Cook, rose 1.5 percent. Mahindra Holidays & Resorts India Ltd. (MHRL), which provides holidays on time-share basis, surged 6.2 percent, the most since June 4. The Sensex fluctuated before the Reserve Bank of India’s policy meeting tomorrow.
The central bank will maintain the repurchase rate at 8 percent to shield the rupee from potential increases in U.S. borrowing costs and sustain a fight against inflation, all 37 analysts in a Bloomberg News survey predict.
Governor Raghuram Rajan said this month the RBI can’t declare victory on inflation yet. He left rates unchanged last month and flagged risks to his goal to slow the increase in the consumer-price index to 6 percent by January 2016. Rajan raised the repurchase rate three times in the past year.
S&P raised its outlook on Indian ratings to stable from negative on Sept. 26, removing the risk of a downgrade to junk status. The ratings company said it could raise the BBB- rating of Asia’s third-largest economy if growth quickens and fiscal, external or inflation metrics improve.
The Sensex has increased 26 percent this year, the best performer among the world’s 10 biggest markets. International investors sold a net $ 68 million of local stocks on Sept. 25, paring this year’s inflows to $ 13.8 billion, still the most among eight Asian markets tracked by Bloomberg.
The gauge trades at 15.4 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s multiple of 10.8, data compiled by Bloomberg show.
Indian markets are closed for holidays from Oct. 2 through Oct. 6.
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