topping 9,000 mark for the first time, amid expectations that Prime Minister Narendra Modi’s first full budget will make the South Asian nation the fastest growing in the world.
Reliance Industries, the owner of the world’s largest refining complex, climbed the most in year as CLSA Asia-Pacific Markets advised investors to buy.
Tata Consultancy Services surged to an all-time high, leading Tata group companies higher. Sun Pharmaceutical Industries gained to a two-week high after buying GlaxoSmithKline’s opiates business in Australia.
The benchmark S&P BSE Sensex rose 0.5% to 29,593.73 at the close, a one-month high, while the Nifty increased 0.4% to a record 8,996.25.
Finance Minister Arun Jaitley on Saturday projected a wider fiscal deficit and boosted funding for infrastructure by 25% to 11.3bn, in an effort to boost Asia’s third-biggest economy.
“People are digesting the complex budget and seeing good things from it,” Jim O’Neill, the former chairman of Goldman Sachs Asset Management and a Bloomberg View columnist, said in an interview to Bloomberg TV India today. “There’s quite a lot of potentially very important things in the medium to long term that will positively benefit India.
This is helping sentiments get better and better.”
Spending on roads, ports and power plants will climb 25% from the amount actually delivered in the year ending on March 31, Jaitley said. India’s economy is projected to grow as much as 8.5% in the year starting April 1, according to the latest government estimates, the fastest pace among the world’s biggest emerging markets.
In comparison, China’s government may set a growth target of about 7% for this year, the official Xinhua News Agency reported.
The forecast, which would be below the 2014 target, may be announced at the start of the National People’s Congress on Thursday.
“We might be in the very early stages of India having multiple years of growth above the Chinese level,” O’Neill said. “If that is the case, people might be gradually re-rating their GDP and their earnings forecasts.”
Reliance surged 4.2%, the most since March 2014. The stock trades at 11.3 times projected 12-month earnings, a 32% discount to the Sensex, after lagging behind the 41% advance in the Sensex over the past year. CLSA analyst Vikash Kumar Jain advised investors to buy “this weakness” in the stock.
The shares can rally 39% over the next 12 months, Jain estimates.
Tata Consultancy advanced 4% to an all-time high. Tata Metaliks soared 16%, the most since October 22. Tata Elxsi Ltd jumped the by limit 20%. Tata Sponge Iron increased 18%, the most since July 24. Tata Global Beverages jumped 3.3%.
Sun Pharmaceutical rose to its highest level since February 5, while Cipla increased 2.1%. Housing Development Finance Corp, the biggest mortgage lender, climbed 2.1%.
Mahindra & Mahindra, the largest maker of tractors, dropped 3.6% after sales fell 10% last month. Tata Motors, owner of Jaguar Land Rover, slid 1.9% after it said JLR India sales declined to 179 units in February from 190 a year earlier.
Foreigners bought a net 79.2mn of local shares on March 1, taking this year’s inflows to 4.5bn, the second- highest among eight Asian markets tracked by Bloomberg, after Taiwan.
The Sensex has gained 7.6% this year and trades at 16.6 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 11.8.
Meanwhile the rupee weakened to 61.9150/9250 per dollar versus Monday’s close of 61.8650/8750 per dollar, as dollar purchases by importers offset dollar sales by foreign banks amid a rise in the NSE share index to a record high.
The benchmark 10-year bond yield ended up 1 basis point at 7.75% as uncertainty over when RBI may ease rates dampened sentiment.
The benchmark five-year rate ended up 5 basis points at 7.10%, while the one-year rate gained 2 basis points to 7.76%.
India’s one-day cash rate rose to 7.35/7.40% vs Monday’s close of 6.90/7.00%.