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Indian stocks climbed, with the benchmark index capping a fourth weekly gain, as drugmakers and consumer companies rose in a volatile session before Holi festivals.
Sun Pharmaceutical Industries advanced to a record Thursday, helping a gauge of health care shares increase for a sixth day. Hindustan Unilever Ltd. increased to a one-month high, sending an index of consumer-goods companies to a third day of gains. Hindalco Industries Ltd. slid to a one-month low, pacing losses among metalmakers.
The BSE Sensex added 0.2 per cent to 29,448.95, after changing direction at least 12 times. The index briefly climbed above the 30,000 mark for the first time on Wednesday after the Reserve Bank of India's second interest rate cut this year. The optimism gave way to stock-picking focused on defensive shares Thursday, as benefits from falling borrowing costs won't immediately filter through to company earnings, according to Equinomics Research Pvt.
"Defensive companies have a solid earnings base, while cyclicals and engineering companies have gone up on the hope of higher earnings," Chokkalingam G., managing director at the Mumbai-based brokerage, said by phone.
Sun Pharmaceutical rose 3.2 per cent, taking its gains in the past year to 67 per cent. Billionaire Dilip Shanghvi, who started Sun Pharmaceutical more than three decades ago selling a single drug, on Wednesday overtook oil-refining tycoon Mukesh Ambani to become India's richest person.
Drugmakers Cipla and Dr. Reddy's Laboratories rose at least 1.5 percent, among the best performers on the Sensex on Thursday. The BSE India Healthcare Index climbed 2.5 per cent to a record.
Hindustan Unilever jumped 2.6 per cent to the highest close since January 29. Colgate-Palmolive (India) Ltd. and Marico, India's biggest maker of hair oil, climbed at least four percent.
The Sensex has risen 7.1 per cent this year and trades at 16.5 times projected 12-month earnings, 14 per cent premium to its five-year average, data compiled by Bloomberg show.
"We are going to see a period of consolidation for the market," Andrew Holland, chief executive officer of Ambit Investment Advisors, said in an interview to Bloomberg TV India. "We like the budget and the rate cut has also happened but kick-starting the economy can't happen overnight."
