Stocks rose for a third day, sending the benchmark gauge to near a one-year high, after quarterly earnings from some of the biggest consumer companies bolstered investor sentiment amid increased overseas capital inflows.
Colgate-Palmolive India and Britannia Industries rallied after reporting strong June-quarter results. Hindalco Industries, the second-largest aluminum maker, rose to a 17-month high after its US unit Novelis Inc swung to profit. State-owned refiners Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp reached records.
The S&P BSE Sensex added 0.4 per cent and a gauge of mid-cap shares jumped one per cent to a fresh all-time high. The Sensex capped a second weekly gain on Friday as foreigners bought $73.1 million of local stocks on August 5, extending this year's inflows to $5 billion. They've been net sellers on just two days since July 1, as flows to developing markets accelerated amid a renewed wave of global policy easing.
"A buoyant global sentiment is leading to consistent inflows into emerging markets," Vaibhav Sanghavi, managing director at Mumbai-based Ambit Investment Advisors Pvt, said in an interview. "It's a risk-on environment. We will continue to participate in the liquidity-driven rally." Sanghavi said he is bullish on consumer discretionary, rural and agriculture-focused industries, non-state-owned lenders and financial companies. Global equities climbed on optimism the US economy is strong enough to sustain growth while only triggering a gradual increase in interest rates. The MSCI All Country World Index headed for its highest close in almost a year, extending Friday's advance that was spurred by a bigger-than-estimated incr-ease in American payrolls.
Colgate-Palmolive jumped 5.8 per cent, the most since April 2013. First-quarter profit rose nine per cent from a year earlier to Rs 126 crore. Britannia soared the most since June 2014 after June-quarter profit climbed 13 percent to Rs 219 crore. Marico, the nation's biggest maker of hair oil, increased 1.2 per cent to a record.
"Consumers companies' results have been very good," Lancelot D'Cunha, chief executive officer at Crest Wealth Management Pvt, said by phone from Mumbai. "They have shown volume growth, which shows consumer demand remains strong. A good monsoon and pay commission payouts will boost rural demand, benefiting them going forward."
Hindalco advanced 3.8 per cent, extending this year's rally to 76 per cent. Its unit Novelis on August 5 reported first-quarter net income of $24 million versus a loss of $60 million in the same period a year earlier.
Indian Oil gained 1.1 per cent, while Bharat Petroleum jumped 3.4 per cent. Hindustan Petroleum soared 4.6 per cent, taking this year's gains to 57 per cent.
The Sensex has rebounded 23 percent from a low in February, and trades at 16.4 times 12-months earnings. That's the most expensive in about 15 months and compares with a multiple of 12.5 for an index of emerging markets. The NSE Nifty 50 Index added 0.3 per cent to its highest level since April 2015.
