Sensex Extends Gains for Fifth Session; Consumer Goods Up

Mumbai: The BSE Sensex and Nifty rose for a fifth consecutive session on Monday, marking their highest level in more than two-weeks, led by consumer goods makers such as ITC on hopes slowing inflation and reforms in the upcoming federal budget would boost spending.

 

India's wholesale prices declined an annual 0.39 per cent in January, their second fall in three months, on the back of a sharp correction in oil prices, government data showed on Monday.

 

India's retail inflation for January stayed well below the central bank's target, data last week showed, bolstering prospects for further interest rate cuts.

 

Investors are hopeful of faster reforms at the government's 2015-16 fiscal budget due on February 28 after the Prime Minister Narendra Modi-led Bharatiya Janata Party was routed in Delhi state elections.

 

"Lower inflation would boost profit and volumes. Budget is also expected to leave more in the hands of consumer for spending," said Deven Choksey, managing director at K R Choksey Securities.

 

The broader NSE index added 0.3 per cent while the benchmark BSE index gained 0.33 per cent, after earlier marking their highest level since January 30.

 

Stocks linked to consumer spending led the gainers. The BSE FMCG index rose 1.5 per cent

 

Among consumer staples, ITC rose 2.1 per cent while Hindustan Unilever gained 1.5 per cent.

 

Among consumer discretionary stocks, Mahindra and Mahindra rose 2.8 per cent while Tata Motors advanced 1.2 per cent.

 

Midcap real estate developers also surged on valuations and quarterly earnings. Housing Develoment and Infrastructure Ltd rose 7.1 per cent while Unitech jumped 12.3 per cent.

 

© Thomson Reuters 2015