Indian Stocks Headed for Weekly Gain; Anil Ambani Companies Lead
India's benchmark stock index rose, headed for its biggest weekly advance in two months. Reliance ADA Group companies controlled by Anil Ambani jumped after a court rejected pleas by public interest litigators seeking to probe the billionaire.
- (1888PressRelease) June 08, 2011 - India's benchmark stock index rose, headed for its biggest weekly advance in two months. Reliance ADA Group companies controlled by Anil Ambani jumped after a court rejected pleas by public interest litigators seeking to probe the billionaire.
Reliance Communications Ltd., the country's second-largest mobile-phone operator, surged 6.7 percent after India's Judge O.P. Saini dismissed suits seeking to probe Ambani and others linked to the 2008 sale of cell-phone permits. Foreign funds turned net buyers of the nation's stocks for a third time this year, data from the regulator show. Reliance Infrastructure Ltd., also owned by Ambani, rallied 5.4 percent.
"The fact that Anil Ambani is not arrested has come as a big relief," said Suhas Naik, chief operating officer at IL&FS Portfolio Management Services Ltd., which manages $100 million in assets. The Bombay Stock Exchange Sensitive Index, or Sensex, rose 110.11, or 0.6 percent, to 18,604.29 at 11:15 a.m. in Mumbai, taking the weekly advance to 1.9 percent. The gain is the most since the five-day period ended April 1. The S&P CNX Nifty Index on the National Stock Exchange of India Ltd. added 0.6 percent to 5,584.75. Its June futures traded at 5,591.20. The BSE 200 Index gained 0.6 percent to 2,311.69.The Sensex has lost 9.2 percent this year amid concern higher borrowing costs will lower earnings. Stocks on the measure are valued at an average 15 times estimated profit, down from 21.5 times in March 2010, last year's high. The MSCI Emerging Markets Index trades at 11.2 times earnings.
Greater Value
The 280-stock BSE Mid-Cap Index has lost 11 percent this year, exceeding losses in the Sensex. Mid-capitalization Indian companies "offer greater value than large caps, and the fact they have underperformed is good news," Chirag Setalvad, a fund manager at HDFC Asset Management Co., India's second-biggest money manager with 863 billion rupees ($19 billion) in assets, said in an interview.Reliance Communications increased 6.7 percent to 95.95 rupees, headed for its steepest climb since March 9. Reliance Infrastructure rallied 5.4 percent to 582 rupees, on course for its biggest jump since Feb. 23. Reliance Power Ltd. added 3.9 percent to 121.20 rupees.Judge Saini also dismissed applications filed by public interest litigators to investigate Tata Group Chairman Ratan Tata, a public relations executive and a state politician in New Delhi. The litigators were fined "frivolous" petitions.
Annual Meet
Overseas funds bought a net 6.9 billion rupees ($154 million) of Indian equities on June 1, making them net buyers of stocks in 2011, according to data on the website of the Securities and Exchange Board of India. "Foreigners turning net buyers is a significant positive for the markets," Megha Vazkar, head of institutional dealing at Maximus Securities Ltd. in Mumbai, said by phone.
Reliance Industries Ltd., the nation's largest company by market value, advanced 0.9 percent to 960 rupees, on course for its biggest gain in a month. Chairman Mukesh Ambani is due to speak at a shareholders' meeting later today. "The market is building a lot of anticipation around the meeting and there are expectations that some big announcements may be made," Vazkar said. Larsen & Toubro Ltd., the biggest engineering company, climbed 1.8 percent to 1,702.85 rupees while Tata Steel Ltd., the largest producer of the alloy, rose 1 percent to 580.85 rupees.
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