Most Indian stocks gained, led by energy and industrial companies, after the US Federal Reserve signalled a slower pace of interest-rate increases. Bharat Petroleum Corp paced a rally among state-run refiners after gasoline and diesel prices were increased. GAIL India, the largest natural-gas supplier, climbed to a six-week high. Bharat Heavy Electricals, a power-equipment maker, was the top gainer on the S&P BSE Sensex. Drugmakers Lupin and Cipla were the worst performers.
The Sensex wiped out a 1.1% gain in late trade to close little changed at 24,677.37 as European equities resumed trading in the red. The Indian gauge rose to a seven-week high earlier, tracking advances in Asian equities, as the Fed pared back the number of rate increases it anticipates enacting this year. “We are reacting to global cues, including European equities, in the absence of domestic triggers,” Vishal Thakker, a trader at Elara Capital, said by phone from Mumbai. “Nothing has changed fundamentally to justify the sharp rally.” The Sensex has risen on all but two days in March after Finance Minister Arun Jaitley in his February 29 federal budget pledged to further cut the fiscal deficit, stoking speculation of an interest-rate cut by the central bank in its April 5 policy meeting. Foreign funds bought $1.8bn of local shares this month as risk appetite returned after global central banks indicated a willingness to continue measures to support growth and stabilise markets.
“The central bank action, or inaction, was no great surprise to us looking at what’s going on in the global economy – things are still very sluggish,” Hugh Young, managing director for Asia at Aberdeen Asset Management, which has $428bn in assets, said in an interview to Bloomberg TV India. Bharat Petroleum surged 5.7%, the most since August 2014. Indian Oil Corp gained 2.6%. Hindustan Petroleum Corp surged 4.3%. Indian Oil on Wednesday raised gasoline price by Rs3.07 a litre in Delhi and diesel price by Rs1.90 a litre.
GAIL India jumped 4%, while Oil & Natural Gas Corp climbed 2.8%. Bharat Heavy Electricals rallied 4.2%. Adani Ports & Special Economic Zone climbed 3.1% to its highest level since January 12.
Foreigners bought$103mn of local shares on March 16, paring this year’s outflow to $1.1bn. The Sensex has risen 7.3% this month and trades at 15.1 times 12-month projected earnings. The MSCI Emerging Markets Index trades at a multiple of 11.6.