Sensex up 1.25pc, posts best qtr since Sept 2009

MUMBAI, June 30 (Reuters): The benchmark BSE Sensex rose 1.25 per cent on Monday as investors bought shares in recent outperformers such as State Bank of India (RBI), allowing the index to post its best quarterly gain since July-September 2009.

The Sensex rose 13.52 per cent in the quarter concluded on Monday, making it the best performer in Asia-Pacific, in a rally spurred by hopes the election of Narendra Modi as India’s prime minister would spur a period of economic reforms.

Modi swept to power in May and the index rose to a record high on June 11.

Sectors expected to especially benefit from reforms such as banks led the gains. State Bank of India, the country’s largest lender, rose 40 per cent for the quarter.

Foreign institutional investors have been the backbone of the rally, buying shares worth a net $6.27 billion.

Whether these gains can sustain will now depend on whether Modi can deliver, starting with the government’s maiden budget to be unveiled on July 10.

“We believe markets will consolidate at these levels and are preparing for the budget. Expectations are much higher and we may see the right soundbites from the government. We may see some consolidation, but are bullish for the near term,” said Samir Gilani, head of sales trading and derivatives at IDFC Securities.