The Indian central bank cut rates last week, and since then the stock market has been on an upward trajectory. The trend continued today.
Today, the markets rose for a third straight day. The benchmark BSE Sensex gained 0.5 percent to at 28,262.01, the best close in over a month, helped by mix of good, and average corporate results.
Wipro led the way. The company's results had beaten analyst estimates, and were announced after close Friday. Today shares responded by jumping 5.3 percent, the most since July 2013. Axis Bank was another winner, as its stock rose 2.8 percent to reach an all-time high after third quarter profit rose 18 percent.
The Sensex had spiked the most in two months last week after Reserve Bank of India governor Raghuram Rajan cut the repo rate in an unscheduled review, and indicated more cuts might happen. Banks usually pass on the cut to consumers, who will have more to spend.
Among the gainers today was Reliance Industries Ltd., although it reported its first profit decline in nine quarters. The fall in price of oil narrowed margins at refining operations and reduced the value of its stockpiles.
Traders might also be considering the possibility of a quantitative easing by the European Central Bank. The move has been expected, in the form of a 550 billion euro bond purchase.
While the earnings season overall has not been great, markets have not crashed over poor earnings partly because external factors such as plunging commodity prices, mainly oil, have helped the Indian economy. In addition, Rajan's stance at the central bank has kept inflation low. Prime Minister Narendra Modi's government has used this opportunity to cut subsidies in diesel and petrol, and introduced reforms in insurance and land acquisition laws. Modi has promised more, and they might happen as soon as February when the budget is presented.
Among the losers today was Hindustan Lever, which reported slower growth as consumers pared purchases due to a sluggish economy. Growth in sales included a gain of Rs 396 crore from sale of assets.
Since January 15, foreign investors have bought shares worth $197 million.