India Shares Snap Two-Day Drop, Cap Best Quarterly Gains in 2018

(Bloomberg) -- Indian equities snapped a two-day decline, with key indexes capping their best quarterly performance this year, as investors expect a revival in economic growth and rebounding corporate profits to shield shares from the impact of global trade frictions and rising oil prices.

The benchmark S&P BSE Sensex jumped 1.1 percent to 35,423.48 at the 3:30 p.m. close in Mumbai, up 7.5 percent in April to June period after a more than 3 percent decline in the previous quarter. Tata Steel Ltd. rose 3.5 percent, the steepest among Sensex members, trimming its decline this year to 18 percent.

Read: Emerging-Market Carnage Sidesteps India as Locals Buy Stocks

Investors bet that India will see strong economic growth and robust company earnings in the second half of the financial year that started April 1 as domestic consumption will offset impacts of higher crude prices, a weaker currency and a strain on the nation's trade and fiscal accounts. “Markets are leading indicators of economy and they will start pricing the up move earlier,” said Ajay Bodke, chief executive officer at Mumbai-based Prabhudas Lilladher Pvt. He sees the NSE Nifty 50 Index trading in 10,300 to 11,000 range.

All the 19 sector gauges compiled by BSE Ltd. rallied, paced by the S&P BSE Consumer Durables Index's 2.9 percent advance. The Nifty gauge climbed 1.2 percent to 10,714.30, stretching its gain this quarter to 5.9 percent. The NSE Volatility Index fell 7.2 percent, its first drop this week.

Here's the latest on what analysts are saying about Indian stocks:

• Indian Retailers Hold Sales to Offset Pre-GST Boost: Jefferies
• Earnings, FDA Challenge Keep Morgan Stanley Equal-weight on Lupin
• Overweight India Consumption-Focused Stocks: Prabhudas Lilladher

To contact the reporter on this story: Ameya Karve in Mumbai at akarve@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Teo Chian Wei, Kasper Viita

©2018 Bloomberg L.P.

Also Read: Nifty Posts Fourth Monthly Loss Of 2018 On Rising Oil, Trade Woes