Mumbai: Indian equities advanced as shares of banks and non-bank lenders gained after the central bank eased rules to give those laden with bad debt more time to resolve delinquent accounts.
The benchmark S&P BSE Sensex advanced 0.7% to 39,872.11 as of 9:45 a.m. in Mumbai, while the NSE Nifty 50 Index gained 0.6%. Both measures capped their first weekly declines in four on Friday, sliding from record high closes on Monday as corporate credit downgrades weighed on investor sentiment.
Indian equities measures have added about 10% this year, bested only by China, Australia and New Zealand among major regional markets. The MSCI gauge of Indian stocks is trading at more than 18 times its 12-month estimated earnings, 53% higher than a rival index of emerging-market equities and 14% more expensive than the MSCI World Index.
Strategist Views
“We expect the banking stocks and markets to react positively to the RBI providing pragmatic rules to resolve non-performing assets,” said Chakri Lokapriya, chief investment officer at TCG Asset Management. “A recent RBI interest-rate cut and giving banks headroom to practically negotiate with companies will also translate into credit flow in broader market and companies, another positive,” he said.
The Numbers
- Seventeen of the 19 sector indexes compiled by BSE Ltd. advanced, paced by a gauge of software exporters. The S&P BSE Finance and the S&P BSE Bankex gauges rose at least 0.8%.
- Twenty-eight of the 31 Sensex members and 43 of the 50 Nifty companies rallied.
- Lenders Yes Bank Ltd., Indiabulls Housing Finance Ltd. and IndusInd Bank Ltd. were among the best performers among Nifty stocks, adding at least 1.8%. –Bloomberg
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