India best performing equity market in Asia-Pacific for 2014
Monday, 26 May 2014 00:00
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Reuters: The BSE Sensex rose more than 1% on Friday, making India the best performing equity market in Asia-Pacific for 2014 in dollar terms.
The benchmark has gained 2% this week on continued hopes the incoming Narendra Modi government would unveil substantial economic reforms.
Gains were also helped as State Bank of India surged after reporting bad loans fell in January-March, sparking a rally in other State-run lenders.
Modi will be sworn in on Monday, ushering in the new Bharatiya Janata Party Government, and investors will first focus on his cabinet appointments, especially the Finance Ministry portfolio. The administration would then need to unveil a new budget by early July.
Still, not all analysts are as optimistic. Deutsche Bank downgraded Indian stocks to “neutral” from “neutral/overweight” relative to other global emerging markets, saying valuations, appeared “very stretched”.
“Earning multiples look a little stretched for short term. July budget would be the next check point for this rally,” said Alok Roongta, Chief Financial Officer at Bharti AXA Life Insurance.
The BSE Sensex rose 1.3%, or 318.95 points, to end at a record closing high of 24,693.35, although the index is still around 3% away from the all-time high hit last week.
This brings the Sensex’s gain so far for the year in dollar terms to 23.71% in 2014, compared to the next best performer, Indonesia’s IDX Composite which gained 22.7%.
The Sensex rose 2.4% for the week, marking its third consecutive weekly gain.
The broader Nifty rose 1.25%, or 90.70 points, to end at 7,367.10, posting a weekly gain of 2.3%.
