Reliance leads benchmark to highest in eight weeks
Investors bet on growth in corporate earnings
Mumbai: Indian stocks rose, driving the benchmark index to an eight-week high yesterday, as investors bet earnings growth will be sustained even as inflation accelerates.
Reliance Industries Ltd., India's most valuable company, climbed on speculation its profitability will improve. Larsen & Toubro Ltd., an engineering company, added 2.9 per cent. Morgan Stanley recommended investors buy the nation's stocks saying they will benefit from faster economic growth and the central bank will contain inflationary pressures by raising interest rates.
"Policymakers will try to balance growth and inflation," said Tejas Doshi, vice-president of equity research at Sushil Financial Services Pvt. in Mumbai. "We are positive on the long-term growth story." He recommends engineering, infrastructure and power companies.
The Bombay Stock Exchange's Sensitive Index, or Sensex, gained 218.19, or 1.3 per cent, to 17,383.18, the highest level since January 20. The S&P CNX Nifty Index on the National Stock Exchange advanced 1.4 per cent to 5,198.10. The BSE 200 Index added 1.1 per cent to 2,175.71.
Reliance Industries rose 3.9 per cent to Rs1,067.95, its highest since January 20. The company paid Rs7.7 billion (Dh625 million, $169 million) in advance tax for the fourth quarter, Bloomberg-UTV reported.
"The advance tax payment validates our view that Reliance will increase profits," said Deven Choksey, chief executive officer of K.R. Choksey Shares & Securities.
