Indian stocks advanced to a two-week high as the nation’s lenders rallied with consumer companies amid gains in regional equities.
The S&P BSE Bankex Index of 10 lenders climbed to a one-month high. The gauge is headed for its best week since July after the Essar Group’s $13bn deal with a group involving Russia’s Rosneft improved prospects for loan recoveries at local banks.
Asian stocks rose for a third day with US equity index futures and the Mexican peso in a signal that investors believe Hillary Clinton held on to her advantage over Donald Trump in the final presidential debate. Domestic investors are watching the quarterly earnings season for signs of whether growth in profits can justify above-average valuations.
“The US elections and the Indian corporate earnings season will decide the course of the markets in the short term,” RK Gupta, managing director at Taurus Asset Management Co, which has $480mn in assets, said by phone from New Delhi. “Until then our daily movements will be dictated by how global equities behave.”
Infosys Ltd and Tata Consultancy Services Ltd, the top software exporters, last week posted disappointing earnings outlook. Reliance Industries Ltd, owner of the world’s largest refining complex, is due to announce results after close of trading yesterday.
The Sensex trades at 16.5 times projected 12-month earnings, compared with a five-year average of 14.5 times. The MSCI Emerging Markets Index is valued at a multiple of 12.6. Jubilant Foodworks Ltd rallied 3.1% in a fifth day of advance after Deutsche Bank AG raised its rating to buy from hold. Jubilant will be among the top gainers as Indian quick-service restaurant business rebounds from a four-year slowdown, analysts Manoj Menon and Mihir Shah wrote in a note.
Logistics companies fell after the GST Council failed to reach an agreement on the rates for the proposed national sales tax. Gati Ltd lost 3% after rallying 9.4% in the past two days. Snowman Logistics Ltd tumbled 3.5%, while VRL Logistics Ltd fell 1.6%. Companies that gained on the tax hopes can fall on rate complications, BoFAML analysts Sanjay Mookim and Anand Kumar wrote in a note. ICICI Bank Ltd, the biggest private lender, jumped 4.7% to its highest level since September 7. The stock was the second-best performer on the Sensex. Adani Ports & Special Economic Zone Ltd was the top gainer on the Sensex with a 5 rally. Yes Bank Ltd rose to a six-week high after its second-quarter profit rose 31.5% to Rs8.02bn, beating estimates.  Hindustan Zinc Ltd climbed 2.2% in a third day of gain after its second-quarter profit exceeded estimates. Kajaria Ceramics Ltd tumbled 9.4%, most since October 2008, after its earnings missed forecasts. Second-quarter profit of Rs636.2mn trailed the estimated Rs739.4mn.
Meanwhile, the US dollar ended higher against the Indian rupee at 66.81/82 per dollar yesterday.