Stocks make 2nd weekly advance on policy measures

The S&P BSE Sensex added 0.4 per cent at the close in Mumbai

Stocks climbed, with the benchmark index capping a second weekly gain, as energy companies and property developers increased after the government accelerated measures aimed at attracting investments and bolstering economic growth.

Cairn India climbed to a four-month high after the government freed prices of natural gas extracted from deep sea fields that start production this year. DB Realty was the top performer on a gauge of realty companies after the upper house of parliament passed a bill to set up an industry regulator. Adani Ports & Special Economic Zone rallied the most in a week, while Lupin, a drugmaker, climbed to a one- month high.

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The S&P BSE Sensex added 0.4 per cent at the close in Mumbai. Lawmakers on Thursday passed the real estate bill and eased rules for mining companies, stoking optimism that Prime Minister Narendra Modi's Bharatiya Janata Party may succeed in garnering support for crucial bills on a national sales tax and a new bankruptcy code that have been blocked by opposition parties in parliament.

"There's been consistent effort to streamline policies and Thursday's measures by the cabinet and the bills cleared in parliament are incremental steps in the right direction," Vaibhav Sanghavi, managing director at Mumbai-based Ambit Investment Advisors Pvt, said in an interview. His fund is bullish on consumer-discretionary companies such as makers of cars and paints, and private banks.

Mining laws

The cabinet approved an amendment to its mining laws that will allow companies to more freely sell assets, as part of Modi's effort to improve ease of doing business in Asia's third- largest economy. The proposal now needs parliament's approval to become law.

The Sensex has risen in seven out of eight days after Finance Minister Arun Jaitley in his February 29 budget pledged to further cut the fiscal deficit, stoking speculation of an interest-rate cut by the central bank. The budget proposals, which include a boost in spending on public and rural welfare projects, have spurred capital inflows. Foreign funds have bought $1.4 billion of local shares this month, paring this year's outflows to $1.5 billion. Asian and European stocks climbed as investors assessed the European Central Bank's fresh stimulus measures announced Thursday.

European shares jumped and tumbled on Thursday as ECB President Mario Draghi delivered interest-rate cuts, more bond purchases and a potential subsidy to lenders and then said the central bank is done with lowering borrowing costs for now. The Stoxx Europe 600 Index soared 2.2 per cent on Friday.

Cairn India jumped 4.5 per cent, while Hindustan Petroleum Corp and Bharat Petroleum Corp rose 1.2 per cent each. DB Realty surged 3.5 per cent. Rival Phoenix Mills gained 0.8 per cent to take this week's surge to 19 per cent. Unitech rallied 13.5 per cent this week.

The Sensex has fallen 5.4 per cent this year and trades at 15.1 times its projected 12-month earnings compared with 11.6 times for the MSCI Emerging Markets Index.