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Indian shares gain nearly 1 pct on hopes of higher consumer spending
October 15, 2015 / 9:44 AM / 2 years ago

Indian shares gain nearly 1 pct on hopes of higher consumer spending

* BSE index up 0.8 pct, NSE index rises 0.9 pct

* Stocks on track to snap three-day losing streak

* Adani group stocks top gainers among BSE large caps

MUMBAI, Oct 15 (Reuters) - Indian shares rose nearly 1 percent on Thursday, on track to snap a three-session losing streak, as consumer stocks gained on hopes lower inflation and a larger-than-expected rate cut by the central bank in September would boost spending in the coming festive season.

India’s wholesale prices fell for an 11th straight month in September, plunging an annual 4.54 percent primarily on the back of tumbling oil prices, government data showed on Wednesday.

India kicks off its two-month religious festive period on Monday, a time considered auspicious to buy big-ticket items such as cars, and when promotions abound. Company executives say they see the Reserve Bank of India’s unexpectedly sharp 50 basis point cut last month as a lifeline.

Consumers have already been showing an eagerness to spend more on small luxuries, like movie tickets and fancy haircuts, even as the overall economy struggles to take off after a period of cooler growth.

“Lower inflation, Seventh Pay Commission and RBI’s rate cut are leaving higher discretionary income with urban people,” said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance Co.

The 30-share BSE index was up 0.8 percent, while the 50-share NSE index was 0.9 percent higher.

Consumer stocks led gains. Tata Motors shares were up 7.7 percent after unit Jaguar Land Rover reported a better-than-expected 3 percent sales growth for September.

ITC rose 2 percent, while Maruti Suzuki gained 2.6 percent.

Zee Entertainment surged 9 percent on better-than-expected September-quarter results.

Shares of Adani group companies were the top gainers among BSE large caps after Australia cleared way for the group’s $7 billion coal and rail project.

Adani Enterprises Ltd surged as much as 15.1 percent to post its biggest one-day gain since April 2014. Adani Power Ltd rose 5 percent and Adani Port and Special Economic Zone Ltd gained 1.5 percent.

Among losers, DCB Bank fell as much as 13.3 pct to its lowest since early November 2014, adding to Wednesday’s 20 percent plunge on its aggressive branch expansion plan.

For other stocks see (Reporting by Abhishek Vishnoi in Mumbai; Editing by Subhranshu Sahu)

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