Sensex rallies on Moody’s report

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fe Bureau: Mumbai, Nov 28 2012, 00:59 IST

Indian stocks soared on Tuesday, rallying to their highest levels in nearly three weeks, with the markets rejoicing in the wake of an affirmation by Moody’s Investors Service that the outlook on India is stable. Brushing aside a falling rupee, a possible washout of the winter session, the fiscal cliff in the US and slowing global growth, the markets celebrated Moody’s positive view on the country as also renewed attempts in the euro area to avert a crisis in Greece.

On Tuesday, the Nifty put on 91.55 points to close at 5727.45 while the Sensex added 1.65% to end the session at 18,842.08 points. Foreign institutional investors continue to shop for Indian equities; with Tuesday’s purchases of $195 million, they have now bought stocks worth more than $19.5 billion so far in 2012, the largest amount in Asia this year. India remains among the best-performing markets in 2012 with the Sensex having posted dollar returns of 16.4%, way above the 7% gained by Indonesia and 9% clocked by Taiwan. The Shanghai Composite has lost 8.3%.

Over the past two to three quarters, both Asia ex-Japan and global emerging market funds have turned overweight on India relative to benchmarks, the former by 1.9% and the latter by 1.0%. Moreover, in a recent report BNP Paribas noted that the sources of FII flows had changed slightly in recent months.