Indian shares climb to one-month high
Indian shares rose on Tuesday to their highest close in more than a month, with drugmakers getting a shot in the arm after Ranbaxy Laboratories Ltd reported its first profit in six quarters. Lenders also extended recent gains on rising expectations the Reserve Bank of India would cut rates earlier than expected next year as slumping crude prices are expected to ease inflationary pressures.
Copyright Reuters, 2014
Hopes for a loosening of monetary policy were also spurred after Finance Minister Arun Jaitley said he favoured a cut in interest rates, during an interview with a newspaper last week. Also helping Tuesday's gains were higher global stocks ahead of the US Federal Reserve's two-day meet, where it is expected to reinforce that a softly-softly approach would be taken to raising rates.
"Interest rates, inflation, reform cycle... everything is in India's favour but it will come down to the Fed's language on rates for the near-term direction," said Nirakar Pradhan, chief investment officer at Future Generali India Life Insurance. The benchmark BSE index rose 0.48 percent, or 127.92 points, to end at 26,880.82.
The broader NSE index gained 0.45 percent, or 35.90 points, to end at 8,027.60, above the psychologically important 8,000 level. Both indexes rose for a sixth day in seven and marked their highest close since September 22. Ranbaxy surged 5.9 percent and was among the leading gainers on the index after swinging to a net profit in the July-September quarter, helped by the exclusive US launch of a generic version of Novartis AG's blood pressure pill Diovan.
Sun Pharmaceutical Industries, which is in the process of acquiring Ranbaxy, rose 4.2 percent. Cipla rose 2.9 percent, while Aurobindo Pharma finished higher 3 percent. Lenders rose amid continued hopes of a rate cut and reforms in the sector. State Bank of India closed up 2.3 percent, while ICICI Bank Ltd ended higher 1.8 percent. Ruchi Soya Industries rose 1.9 percent. India is considering raising import taxes on crude and refined vegetable oils to protect local farmers and the refining industry, two government sources said.