Sensex advances to record as rupee rallies on inflows 

 

Sensex, Nifty close at new highs as foreign investors extend Asia’s largest equity market inflows 

The Sensex has risen 5.5% this quarter, beating stocks in Brazil, Russia and China, as improving government finances, cooling inflation and forecasts for a change in government after next month’s general election lure inflows. Photo: HT

Mumbai: India’s benchmark stock index rose to a record after the rupee strengthened to its highest level in eight months as foreign investors extended Asia’s largest equity-market inflows.

State Bank of India (SBI) rallied to an eight-month high after the central bank extended the deadline for lenders to meet global capital norms by a year to March 2019. Tata Power Co. Ltd advanced the most on the S&P BSE Sensex. Hindalco Industries Ltd jumped to a 14-month high, leading metal makers higher.

The S&P BSE Sensex added 0.6%, or 125.60 points, to 22,339.97, closing at a record for a fourth time this week. The measure has risen 5.5% this quarter, beating stocks in Brazil, Russia and China, as improving government finances, cooling inflation and forecasts for a change in government after next month’s general election lure inflows.

Foreign funds have bought $9.3 billion of local shares and bonds this year, the most among eight Asian markets tracked by Bloomberg.

“The economy has bottomed, and there’s expectation that gross domestic product growth will improve, inflation will come down and that is prompting foreign investors to come in,” Punita Kumar-Sinha, managing partner at Pacific Paradigm Advisors, told Bloomberg TV India on Friday. “People are thinking that if there’s a strong government after the elections, it might be too late to enter.”

SBI jumped 3.52%, taking its gains this past week to 12%. Goldman Sachs Group Inc. on Thursday advised investors to buy shares and increased its price target by 44%. Axis Bank Ltd rallied to a 10-month high.

The S&P BSE Bankex index rose to its highest level since 30 May. The CNX PSU Bank index jumped 4.7%, the most since 31 October.

Bad loans

Stressed assets, which include bad and restructured loans, amounted to 10.2% of total advances by lenders as of 30 September, the highest in at least 12 years, the Reserve Bank of India (RBI) said in a December report. Government-run banks have distinctly higher stressed advances, the authority said.
nitesh kumar singh
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source-- mintlive