Robust earnings spice up Indian stocks

Indian stocks completed their longest string of gains for 10 months on Thursday while Hong Kong equities enjoyed their best winning streak for more than a year on hopes that Asian markets may have found support after May’s heavy sell-off.

But renewed sovereign debt fears among the European peripheral nations limited gains across the region with the FTSE Asia-Pacific inching forward just 0.01 per cent to 221.59.


“We’re much happier over here in Asia, but we don’t live in our own world,” said Nicholas Yeo of Aberdeen Asset Management. “What happens in the west will affect Asia.”

Robust earnings expectations drove Mumbai’s BSE Sensex 0.9 per cent higher to 17,616.69, its highest close since the end of April and its seventh successive session of gains.

“The market will remain very volatile but India is doing well,” said DK Aggarwal of SMC Wealth Management Services. “Investors are buying selectively.”

Reliance Communications, India’s second-largest wireless carrier, added 2.4 per cent to Rs191.70 – its highest level for eight months – on reports that it is considering raising up to $500m by selling as much as 26 per cent of its Reliance Globalcom unit, which owns an undersea cable system.

Oil & Natural Gas, India’s largest state-owned oil explorer, gained 1.9 per cent to Rs1,186.05 after it was rated a “buy” by Deutsche Bank with a price target of Rs1,300.

Ramsarup Industries, a maker of steel wire, surged 11 per cent to Rs81, on a report that ArcelorMittal, the world’s largest steel company, may buy a stake.

A rapidly expanding economy boosted the outlook for industrial bellwethers Larsen & Toubro, the nation’s biggest engineering company, and Reliance Industries, the energy major that has the biggest weighting on the Sensex.

Larsen rallied 3.3 per cent to Rs1,777, its biggest one-day rise in a month, while Reliance gained 1.3 per cent to Rs1,071.40 ahead of its annual meeting on Friday.

Hong Kong matched Mumbai in recording its seventh successive session of gains, as the Hang Seng index climbed 0.4 per cent to 20,138.40.

Standard Chartered surged 4.1 per cent to HK$194.60 as the UK lender that earns at least three-quarters of its profit in Asia said it would form a partnership with the Agricultural Bank of China – poised for the world’s biggest flotation – to work together in retail and wholesale banking.

Strong manufacturing data out of the US boosted stocks with significant stateside interests. Li & Fung, a trading company that generates two-thirds of its sales in the US, increased 4.4 per cent to HK$ 38.15.

CNOOC, China’s biggest offshore oil explorer, gained 2.3 per cent to HK$13.42 after an HSBC upgrade.

The index of China stocks listed in Hong Kong, or H shares, rose 0.3 per cent to 11,592.22, but the leading mainland index gave up early gains after failing to breach a psychological barrier at 2,600 points that has capped the market since the big sell-off last month.

The Shanghai Composite ended the session 0.4 per cent lower at 2,560.20, retreating from a high of 2,595.5 in early trading.

The biggest gainer among Asia’s stock markets was Indonesia, with the Jakarta Composite rising 1.1 per cent to 2,891.10 as optimism over the region’s growth buoyed shares.

But Tokyo stocks slid for the first time in six days, falling 0.7 per cent to 9,999.40 – the Nikkei 225 Average slipping below the 10,000 mark that has acted as both a support and resistance level over the past year.