Sensex closes 122 points higher, Nifty above 8,100; Lupin, HUL, ITC top gainers

Mumbai: Indian stocks advanced as investors bought companies most-tied to the economy after the UK’s decision to leave the European Union left global markets in disarray.

Drugmaker Lupin Ltd surged the most in three months, while Bharti Airtel Ltd rallied the most in a week. Hindustan Unilever Ltd (HUL) had the steepest advance since 21 March and ITC Ltd, the largest tobacco company, climbed to a one-month high. Tata Motors Ltd, Tata Consultancy Services Ltd (TCS) and Wipro Ltd, which get about a quarter of their sales from Europe, were the worst performers on the S&P BSE Sensex.

About $3.6 trillion has been wiped from the value of global shares since the day of the vote last Thursday. In India, an index of smaller companies climbed to its highest level since January as investors snapped up companies that gain the most from Prime Minister Narendra Modi’s growth-boosting policies and have no business links with Europe.

The S&P BSE Sensex closed 0.46%, or 121.59 points, higher at 26,524.55, while the Nifty 50 closed 0.41%, or 33.15 points, higher at 8,127.85.

“India could be a relatively safer haven,” Arvind Sanger, managing partner at Geosphere Capital Management Llc, told Bloomberg TV India. “India remains one of the few bright spots in the world with everybody else being in trouble, and you have a government that is singing the right notes. Money will come in slowly.”

Gains in Indian equities came amid a rebound in global markets, with European stocks, the pound and commodities all climbing for the first time since Britain’s shock vote to exit the European Union amid speculation policy makers will take steps to limit any economic fallout.

Investors are now looking to central banks for support, with Fed Funds futures indicating there is a 20% chance the Federal Reserve will cut interest rates by February and a 9% likelihood of an increase. Prior to the UK referendum, there was zero prospect of a reduction and a 52% probability of an increase.

Lupin jumped 4.4%, the best performance on the Sensex. Bharti Airtel increased 1.35%, ending two days of declines. Larsen and Toubro Ltd, the most valuable engineering company, rose for a second day.

HUL climbed 3.25%, while ITC advanced 2.59%. The companies have a combined 11% weighting in the Sensex.

Tata Communications Ltd climbed to a one-month high. The telecom services provider is planning to sell a majority stake in South African Internet-service provider Neotel Pty Ltd to closely held telecommunications company Econet Wireless Global, according to people familiar with the matter.

Overseas funds sold $85 million of local shares on 24 June. Global investors have still invested $572 million in Indian equities in June, set for the fourth month of purchases, data compiled by Bloomberg show.