Indian stocks advance ahead of vote results

Bloomberg

Indian equities rose ahead of the official outcome of national elections on Thursday, with nearly all exit polls projecting the re-election of Prime Minister Narendra Modi.
The S&P BSE Sensex gained 0.4 percent to 39,110.21 in Mumbai, while the NSE Nifty 50 Index gained 0.3 percent to 11,737.90.
The benchmark stock index retreated after closing at a record high as exit polls pointed to another term of government by Bharatiya Janata Party and its allies, with a comfortable majority.
The MSCI gauge of Indian shares trades at almost 18 times its estimated one-year earnings compared with the MSCI Emerging Market Index’s 11.6 times.
The markets were quiet today ahead of “the main event tomorrow,” said Avinash Gorakshakar, head of research at Mumbai-based Joindre Capital Services Ltd.
If the Modi-led coalition crosses the 300-seat mark on May 23, Nifty may touch 12,000, Gorakshakar said.
“We will see a mild sell-off if the seat count is 220 to 250, but a massive one if they fall below 200.”
Fifteen of the 19 sector indexes compiled by BSE Ltd advanced, led by a gauge of banks. Twenty-five of the 31 Sensex members and 33 of the 50 Nifty companies gained. IndusInd Bank Ltd rose the most among Nifty members, climbing 4.9 percent.
The lender’s January to March net income lagged behind analyst estimates after it said about 30 billion rupees ($431 million) of loans to defaulter IL&FS group turned bad. Dewan Housing Finance Corp fell 9.5 percent, the steepest on S&P BSE 200 and S&P BSE 500 indexes.
The mortgage lender has stopped accepting fresh deposits after a debt rating downgrade. A BSE gauge of mid-sized companies retreated 0.2 percent, a second straight day of fall.
The S&P BSE SmallCap Index gained 0.5 percent. Net incomes at 25 of the 39 Nifty companies that have reported earnings so far have either topped or met the analyst estimates, according to data compiled by Bloomberg. The NSE Volatility Index climbed 7.7 percent, extending its two-day advance to 17 percent.