Mumbai: A rally in automakers and producers of appliances helped Indian equities complete their first weekly advance in four even as declines in the nation’s biggest tobacco company and the most valuable drugmaker forced the benchmark index to close little changed Friday.
Maruti Suzuki India Ltd., the largest carmaker, and Bajaj Auto Ltd. were among the top performers on the S&P BSE Sensex on optimism the proposed wage increase for state employees will spur demand. GAIL India Ltd., a natural-gas supplier, soared the most in six years. Cigarette maker ITC Ltd. and Sun Pharmaceutical Industries Ltd. slid about 2 per cent each.
The Sensex added 0.1 per cent at the close, capping a week that saw the gauge climb on all but one day. It dropped in the previous three weeks after foreigners withdrew $611 million from stocks and the ruling Bharatiya Janata Party’s loss in a state election raised concern about its ability to push reforms. The index must climb above its moving average for the week’s gains to sustain, according to Geojit BNP Paribas Financial Services Ltd.
“The Sensex and the Nifty are trading below their 50, 100 and 200-day averages and that’s not giving confidence to traders that the gains can be sustained,” Alex Mathews, the head of research at Geojit BNP Paribas Financial Services Ltd., said by phone from the southern state of Kerala.
Maruti Suzuki rose 1.9 per cent, taking the year’s advance to 42 per cent, the most on the Sensex. Bajaj Auto added 2 per cent to climb to its highest level since Oct. 30. The S&P BSE Consumer Discretionary Goods & Services Index climbed 2.7 per cent this week, the most since August.
“We’re advising investors to buy shares of carmakers and housing companies as they are likely to be the biggest beneficiaries” of the pay commission report, Mathews said.
GAIL India soared 10 per cent, extending this week’s rally to 24 per cent, the most since January 2004. It was the best performer on the 167-member Bloomberg World Utilities Index this week. Gujarat Gas Ltd. rose 5.5 per cent. Petronet LNG Ltd. surged 6.8 per cent to a record and Indraprastha Gas Ltd. increased 3.8 per cent.
Gas distributors rallied after report that Qatar’s RasGas is ready to modify its long-term accord with Petronet LNG, raising hopes of a reduction in prices of imported gas. Petronet currently has a long-term pact with RasGas to buy 7.5 million tons annually. The suppliers will receive a “big boost” if the agreement is revised and gas becomes available at the current market rate, said Piyush Jain, an analyst at Morningstar Investment Services.
Foreigners sold a net $46.5 million of local shares on Thursday, a seventh straight day of outflows. The withdrawals pared this year’s inflows to $3.8 billion. The Sensex trades at 15.2 times its projected 12-month profits, versus the 11.3 times for the MSCI Emerging Markets Index.
