(MENAFN- Gulf Times) Indian stocks advanced for a fourth day, with the benchmark index capping its biggest annual increase in five years.
Axis Bank, this year's best performing stock on the S&P BSE Sensex, rose to a record. Tata Power, the biggest decliner of 2014, climbed for a third day. Maruti Suzuki India pared its annual gain to 89% after the government said it won't extend tax breaks to local automakers.
The Sensex climbed 0.4% to 27,499.42 at the close in Mumbai. It rallied 30% in 2014, the most among the world's 20 biggest markets after China. Foreigners bought $16bn of local stocks on expectations economic growth will rebound after Prime Minister Narendra Modi won the biggest mandate in 30 years in May.
A further extension of the rally in 2015 may hinge on Modi's ability to push through reforms after opposition parties stalled the passage of some key bills.
"The bumper returns that stock markets in India had in 2014 can easily be replicated in 2015, provided there is deliverance of reforms," Ajay Bodke, head of investment strategy and advisory with Prabhudas Lilladher, said in an interview.The Sensex's rally in 2014 came even as it lost 4.2% in December, its worst monthly decline since February 2013. Equity investors have pared expectations for a revival in Asia's third-largest economy amid Modi's failure to push through legislation designed to attract foreign capital.
The monthly drop reduced the gauge's increase this quarter to 3.3%.
The 50-stock CNX Nifty Index added 0.4% to 8,282.70, taking its rally in 2014 to 31%. Trading volumes in the Nifty were 44% lower than the 30-day average, data compiled by Bloomberg show.
Axis Bank added 0.7%, taking this year's gain to 93%, the most since 2009. ICICI Bank, India's biggest private lender, climbed 0.8%. Tata Power, the biggest non-state power electricity generator, narrowed its 2014 loss to 6.8%.
Maruti Suzuki fell 0.5%, while Mahindra & Mahindra, India's largest maker of sport-utility vehicles and tractors, decreased 1.9%. Finance Minister Arun Jaitley has decided against extending a tax break benefiting the local automobile industry in a bid to narrow the government's budget deficit, a ministry official told reporters in New Delhi, asking not to be identified citing rules.
International investors sold a net $34.3mn of local shares on December 29, paring this year's inflows to $16bn, the most in Asia after Japan. Indian stocks and bonds may attract about $18bn to $20bn in 2015 amid waning risk appetite, according to Credit Suisse Group, versus this year's inflows of $42bn. The Sensex is valued at 15.1 times projected 12-month earnings, compared with the MSCI Emerging Markets Index's multiple of 11.1.
Meanwhile, the rupee fell 0.2% to 63.6750 a dollar in Mumbai, prices from local banks compiled by Bloomberg show.
Asian shares mixed as Greece fears weigh on euro
Asian markets were mixed in limited trade yesterday as investors wound down on the last day of the year, while concerns about Greece's political crisis kept the dollar and euro under pressure against the yen.
There was little reaction to confirmation from HSBC that its index of China's manufacturing activity had contracted in December.
Hong Kong rose 0.44%, or 103.94 points, to 23,605.04 - helping the Hang Seng Index to top off a turbulent year with a gain of 1.28%.
Sydney slipped 0.10%, or 5.6 points, to close at 5,411.0, ending 2014 with a loss of 1.10%, while Wellington shed 0.16%, or 8.91 points, to 5,568.28 - marking a surge of 17.55% over the year.
In afternoon trade Shanghai - the best regional performer by far this year - was up 0.68% and more than 50% higher over 12 months. Taipei was flat in late trade and Singapore edged up 0.12%.
Tokyo, Jakarta, Manila, Seoul and Bangkok were closed for public holidays.
Wall Street and Europe provided a negative lead as Greece's political turmoil returned to centre stage after lawmakers failed to elect a new president, leading the government to call a snap election for next month.
Markets fear the anti-austerity, far-left Syriza party could win the polls and roll back measures required under the IMF-EU bailout of the country, in turn further weakening the eurozone economy.
On Tuesday Prime Minister Antonis Samaras turned up the pressure by declaring a win for Syriza could lead to Greece leaving the eurozone.
"This struggle will determine whether Greece stays in Europe," Samaras said, as he asked the outgoing president to dissolve parliament ahead of an election set for January 25.
The turmoil has rattled markets, pushing the euro - already suffering because of the eurozone's limp economy - down against the dollar and yen as traders looked for safer investments.
However in Asian trade the single currency edged up slightly to $1.2160 from $1.2154 in New York. It was also at ¥145.25 against ¥145.20 in US trade and ¥146.15 in Asia earlier Tuesday.
The greenback was also lower against the yen on risk aversion. It bought ¥119.44 in Asia compared with ¥119.45 and ¥120.42 earlier Tuesday in Asia.
Oil prices edged lower as dealers awaited the latest US supply report to get a picture of demand in the world's biggest economy. US benchmark West Texas Intermediate for February delivery fell 38¢ to $53.74 while Brent crude for February eased 49¢ to $57.41 in mid-morning trade.
Gold was at $1,199an ounce, compared with $1,186.51 Tuesday.
In other markets, Kuala Lumpur lost 0.32%, or 5.58 points, to close at 1,761.25.
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