India’s stock markets headed for a second consecutive session of gains on Tuesday as companies with big rural sales such as Hero MotoCorp rose after the country’s only private weather forecaster said 2016 monsoon rains were likely to be above average.
Monsoon rains are expected to be 105 percent above a long-term average, with a 35 percent probability of above average rainfall, Skymet said in a statement on Monday. State-run India Meteorological Department is expected to issue its forecast later in the day.
Above average monsoon rains play a key role in boosting demand for an array of consumer goods, as 70 percent of India’s 1.3 billion people live in villages.
However, broader gains were capped as companies geared up to report earnings. Among major companies, software services provider Infosys is due to report its results on Friday.
“Market is taking monsoon forecast news positively but the important trigger will be the earnings report and global cues,” said Daljeet Singh Kohli, head of research at India Nivesh Securities.
“At the moment, there are no positive triggers that could drive markets upwards, so we could see a range-bound trend between 7,500 to 8,000 on Nifty.”
The broader NSE Nifty was up 0.31 percent at 7,695.14 as of 0845 GMT, while the benchmark BSE Sensex was 0.33 percent higher at 25,104.72.
Agriculture-related stocks jumped on better-than-normal monsoon forecast. Jain Irrigation Systems rose 6 percent, while Insecticides (India) Ltd soared 17 percent.
Hopes of revival in rural demand also boosted two-wheeler maker Hero MotoCorp and consumer goods firm Hindustan Unilever. Hero MotoCorp and Hindustan Unilever were up 2 percent and 0.6 percent, respectively.
Jewellery makers, including Tribhovandas Bhimji Zaveri, rose after they re-opened shops following nearly six weeks of protest.
Nestle India gained 4.4 percent after the company said on Monday all 29 samples of Maggi noodles tested clear by government test lab Central Food Technological Research Institute.
Tata Steel fell 2 percent on concerns over the company’s pension liabilities in UK after it agreed to sell one of its plants there to Greybull Capital.