Sensex rises to 7-month high

Shares climbed for a fifth day, led by utilities and automakers, amid optimism about the outlook for company earnings and increases in regional equities.

Coal India, the world's top producer, gained the most in three months after raising prices. Hindalco Industries,an aluminum maker, jumped the most in seven years after its profit doubled. NTPC, the largest power generator, posted the steepest climb in two months after posting earnings that beat estimates. Tata Motors was the best performer on the Sensex before its earnings due Monday.

The Sensex added 0.3 per cent at the close in Mumbai, extending last week's 5.3 per cent rally, the steepest since March. A recovery in corporate profits after a drop in four of the last five quarters and forecast for above-average rainfall, following back-to-back droughts has boosted confidence in Asia's fourth-biggest stock market. Foreign funds bought $98 million of domestic stocks on May 27, taking the month's inflow to $324 million.
 

"We're seeing the green shoots of recovery in corporate earnings," D K Aggarwal, chairman of SMC Investments, said over phone. "Plus, there's stability on the global front.

We have all the positive factors going for us." He is advising clients to buy shares of lenders and companies linked to building infrastructure.

Fifteen out of 28, or 54 per cent, of the 30 Sensex companies that have reported March-quarter earnings have beaten or matched estimates.

That compares with 53 per cent in the three months ended December. Sales have increased five percent year-on-year after five straight quarters of declines, data compiled by Bloomberg show.

Showers in the June-September season starting June 1 are seen at 109 percent of the mean of about 89 centimeters (35 inches), Skymet Weather Services, a New Delhi-based private forecaster, said last week. That's more than the quantum forecast by the state weather office and would be the highest since 1994.