Most Indian stocks advanced, led by industrials and utilities, as some investors bought companies most tied to the economy after the International Monetary Fund raised its growth forecast for the nation.
Larsen & Toubro Ltd. (LT) and Bharat Heavy Electricals Ltd. (BHEL), India’s largest engineering companies, climbed the most in two weeks. Oil & Natural Gas Corp., the biggest explorer, halted two days of losses. NTPC Ltd. climbed for a second day after the power generator said it plans to add capacity. Infosys Ltd. (INFO) led software makers lower. Sun Pharmaceutical Industries Ltd. (SUNP), India’s most valuable drugmaker, fell the most in two weeks.
Three stocks rose for every two that fell on the S&P BSE Sensex (SENSEX), which traded little changed at 26,306.09 at 11:24 a.m. in Mumbai. The IMF yesterday raised its 2014 growth forecast to 5.6 percent from 5.4 percent and predicted Asia’s third-largest economy will expand 6.4 percent next year even as it pared its outlook for global growth in 2015.
“We are seeing some sector churning as investors favor companies linked to the Indian economy rather than the global economy” after the IMF report, R.K. Gupta, managing director of Taurus Asset Management Co., which has about $ 670 million, said by phone from New Delhi. “The IMF’s forecast for India shows the economy will be resilient to global pressures.”
Larsen & Toubro added 2.4 percent, halting four days of declines, while Bharat Heavy, India’s largest power-equipment maker, jumped 3.9 percent.
NTPC climbed to a one-month high. The company will acquire a power company in the year starting April 1 and will add 1,800 megawatts of capacity by March, Chairman Arup Roy Choudhury said in Mumbai after market hours yesterday.
Sun Pharma fell 1.9 percent. Rival Cipla Ltd., which gets 58 percent of its sales from overseas, was the second-worst performer on the Sensex. Dr. Reddy’s Laboratories Ltd. headed for the lowest level in two weeks.
Infosys declined 2.8 percent, the biggest decliner on the Sensex. The company releases results for the September quarter on Oct. 10, marking the start of the reporting season. Profit may have risen 22 percent to 29.6 billion rupees, according to the median estimate of 19 analysts surveyed by Bloomberg.
Tata Consultancy Services Ltd. (TCS), India’s largest software exporter, lost 1.9 percent and Wipro Ltd. (WPRO) tumbled 2.6 percent. The three companies get about 90 percent of sales from abroad.
Sensex company profits are likely to grow 24 percent over the next 12 months, compared with 17 percent for companies on the MSCI Emerging Markets Index.
The Sensex has increased 24 percent this year, the best performer among the world’s 10 biggest markets, and is valued at 15.2 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 10.8.
International investors bought a net $ 95 million of Indian stocks on Oct. 1, taking this year’s inflows to $ 13.9 billion, the most among eight Asian markets tracked by Bloomberg.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at firstname.lastname@example.org
To contact the editors responsible for this story: Michael Patterson at email@example.com Ravil Shirodkar, Phani Varahabhotla