Rural sector stocks extend rally after IMD predicts above normal monsoon

Shares of companies whose business is related to the rural sector were trading higher for the second straight day after India's weather department predicted above normal monsoon this year.

Swaraj Engines (12% at Rs 1,126), Mahindra & Mahindra (up 7% at Rs 1,321) and VST Tillers Tractors (4% at Rs 1,783) from automobiles, Insecticides (6% at Rs 425), Kaveri Seed Company (6% at Rs 404), PI Industries (5% at Rs 643), Coromandel International (5% at Rs 219), Tata Chemicals (4% at Rs 390) and Rallis India (4% at Rs 190) from fertilizers and agrochemicals were up more than 3% each on the BSE.

At 10:51 am, the S&P BSE Sensex was up 1.7% or 430 points at 25,576.

After two consecutive droughts, the India Meteorological Department (IMD) on Tuesday said the monsoon this year is expected to be “above normal.” It forecast monsoon at 106% of the Long Period Average (LPA). This is the first time since 1999 that department has made an “above normal” prediction.

Earlier, a private weather forecaster, Skymet, also forecasts above normal southwest monsoon rainfall in the country during the June – September, 2016 period. According to Skymet, rainfall during this period is likely to be at 105% of its long period average of (LPA) of 887mm, with a margin of error of +/- 4%.