Sensex gains as Brexit concerns ease

STOCKS rose on Friday, helping the Sensex almost erase its weekly drop, as financial and real estate shares climbed and speculation grew that the UK won’t vote to leave the European Union.

The Sensex advanced 0.4% to 26,625.91 points, trimming its decline from June 10 to less than 0.1%. Local equities tracked gains in Asia as the killing of a UK lawmaker on Thursday fueled speculation that Britons could be more inclined to vote to stay in the EU in the June 23 referendum. The NSE Volatility Index, a measure of protection against stock-market swings, fell from a two-month high.

Anxiety stemming from a so-called Brexit curbed demand for riskier assets, wiping more than $2 trillion from the value of global stocks over the past week or so. Campaigning for the referendum was suspended for a second day on Friday after the murder of Labour Party lawmaker Jo Cox.

“The markets will track their global peers until the Brexit event gets out of the way,” said Chokkalingam G., managing director at Equinomics Research & Advisory. “We expect volatility to rise.”

The Sensex has surged 16% since hitting a 21-month low in February and is up 2% in 2016 as forecasts for the strongest monsoon in two decades and India’s world-beating economic growth lured $2.8 billion in inflows from foreign funds this year.

Tata Motors, the owner of Jaguar Land Rover, rose 2.2% in a fourth day of gains. Bharti Airtel, the country's largest mobile phone operator, rallied 3%, the most since June 1. Coal India, the world’s largest miner of the fuel, advanced 1.8%. Tata Consultancy Services, the nation’s largest software services exporter that gets a quarter of its revenue from Europe, added 1.7%, the most since June 1.

Investors are closely watching the progress of the JuneSeptember monsoon season, which accounts for more than 70% of the nation’s annual rainfall. The showers were 25%belownormalasof Thursday, the weather department said. The gover nment is counting on above-nor mal precipitation to control food prices, boost farm output and ease a water shortage caused by back-to-back droughts.

“You have to keep your fingers crossed because the stakes are too high this time when it comes to the monsoon,” Sachin Shah, a fund manager at Emkay Global Financial Services, said in an interview with Bloomberg TV India.

Housing Development Finance climbed 2.2%, making it the second-best performer on the Sensex after Bharti. The country’s largest mortgage lender is in talks with the Max Group to merge their life insurance units, sources said. Max Financial Services surged 11%, the most since June 2009.

Shares of real estate developers rallied before a meeting of the capital markets regulator. DLF jumped 2.7%, while Unitech soared 15%. Sobha rallied 4.4% to its highest level since December 28. The S&P BSE India Realty Index surged 3.5% to its highest in more than 12months.Itwasbestperformer onFridayamongsectoralindexes tracked by the BSE.

The Securities and Exchange Board of India’s meeting can be a “booster shot for realty companies where the regulator may possibly allow Real Estate Investment Trusts, or REITs, to invest 20% in projects under construction,” said Suniil Pachisia, vice-president at Pratibhuti Viniyog in Mumbai. “This can be a game changer and an attractive opportunity for reviving the sector.” Bloomberg