Indian shares head for biggest single-day gain
INDIAN shares rose heading for their biggest single-day gain in more than a month, led by banking stocks on relief that corporate earnings were not as terrible as feared, and on a report that the country’s state-run pension fund would start investing in equity markets next week.
ICICI Bank, India’s biggest private sector lender by assets, reported a 12 percent rise in quarterly profit, beating estimates, and its bad loan ratio fell sequentially, sending its shares higher by more than 5 percent.
Sentiment was also boosted after NewsRise reported that the Employees’ Provident Fund Organisation will make its first investment into equity markets on Aug. 6, quoting its chief.
With more than $100 billion of assets from some 80 million members, the EPFO is one of the world’s largest. It will begin by investing in Indian exchange traded funds, with the goal of earning higher returns.
“The market is breathing a sigh of relief on corporate earnings,” said Gaurang Shah, vice-president at Geojit BNP Paribas.
The BSE index was higher 1.22 percent and the NSE index was up 1.07 percent, heading towards their biggest single-day percentage gain since June 22.
The NSE index was on track to end the week higher by 0.3 percent and the month by about 2 percent.
Shares of public sector banks rose after Finance Minister Arun Jaitley sought parliamentary approval to spend a net additional $4 billion in the current fiscal year, almost half of it earmarked to inject capital into state-run lenders struggling with bad debts.
State Bank of India rose 5 percent, while Axis Bank gained 1.5 percent.
ITC added 2.3 percent, while Larsen & Toubro was trading up 0.6 percent ahead of its corporate results later in the day.
Hindustan Copper rose as much as 10 percent on a news report that the government had approved a plan to sell 15 percent stake in the company.
Meanwhile, Kotak Mahindra Bank fell over 3 percent after the company said on Thursday it expected credit costs to jump this fiscal year as it makes more provisions related to its purchase of smaller local rival ING Vysya Bank.