MidCaps Send India Stocks Higher as OPEC Deal Lifts Asia Markets

  • Foreign investors turn buyers for first time in three days
  • Sensex headed for first quarterly advance since March 2015

By Rajhkumar K Shaaw and Santanu Chakraborty

(Bloomberg) —

Indian stocks climbed for a second day, led by advances in mid- and small-sized companies, after OPEC’s agreement to cut oil production buoyed energy shares and boosted demand for riskier assets.

Energy companies and automakers led gains, putting the benchmark indexes on course for their first quarterly climb since March 2015. Global funds turned buyers of local shares on Tuesday for the first time in three days. They’ve invested $770 million in Indian equities this month, the most in Asia after South Korea.

“The marginal but positive OPEC comments to cut production is good for flows into India,” Chakri Lokapriya, Mumbai-based chief investment officer at TCG Advisory Services, which manages about $3 billion in assets worldwide, said by phone. “Also, data on derivatives rollovers point to markets going higher.”

The roll cost, or the price traders are paying to replace current month futures with October securities, was at 62 basis points at 11:37 a.m. in Mumbai on Thursday, which is expiry day. That compares with a three-month mean of 56 basis points, data compiled by Bloomberg show. Investors carried over 55 percent of their September contracts at this time of day, approaching the three-month average of 59 percent, the data show.

Monthly derivatives contracts in India lapse on the last Thursday of the month. The markets tend to be volatile on expiry day as traders roll over their position to the next month.

Asian stocks gained after OPEC agreed to a preliminary deal that will cut production for first time in eight years. The MSCI Asia Pacific Index rose 0.4 percent as of 3:09 p.m. in Tokyo, set for its best quarter since the first three months of 2012. Oil surged the most since April as the rally rippled across global markets, sending stocks and exporter currencies higher.

  • Oil & Natural Gas Corp. and GAIL India Ltd. were the best performers on the Sensex. Reliance Industries Ltd., owner of the world’s largest refining complex, advanced fifth time in six days.
  • Multi Commodity Exchange of India Ltd. jumped the most in 19 months after the regulator approved commodity options.
  • ICICI Prudential Life Insurance Co Ltd. fell 5 percent in its trading debut. The IPO was the biggest share sale in six years.

To contact the reporters on this story:
Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net;
Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net