Bloomberg/Mumbai
India’s benchmark stock index was the second-best performer in Asia yesterday after its recent decline to a 15-month low attracted investors.
An Indian share broker looks at her computer screen at the financial market in the Eastern Indian city of Kolkata. India’s benchmark stock index was the second-best performer in Asia yesterday after its recent decline to a 15-month low attracted investors
Reliance Industries Ltd, the owner of the world’s largest refinery complex, surged the most this year. Oil & Natural Gas Corp, the largest state-run oil explorer, jumped 3.8%. Tata Motors Ltd, the biggest truckmaker and owner of Jaguar Land Rover, advanced for the first time in four days.
The Bombay Stock Exchange Sensitive Index, or Sensex, surged 200.03 points, or 1.2%, to 16,341.70 at the 3.30pm close in Mumbai. The gauge slumped 4.1% last week, its fourth week of losses and the longest losing run since October 2008, when the collapse of Lehman Brothers Holdings Inc froze credit markets. The S&P CNX Nifty Index rose 1.1% to 4,898.80 and its August futures settled at 4,910.45. The BSE 200 Index increased 1.2% to 2,027.77.
“The Nifty is looking oversold on the charts,” said Shardul Kulkarni, a technical analyst with Angel Broking, who correctly predicted in June a 14% decline in the index.
On August 19, the Sensex closed at its lowest level since last May. Its 14-day relative strength index, which measures how rapidly prices increased or fell in the specified period, was 22.8 on the day, the lowest since October 2008. Some investors see readings of below 30 as a signal to buy.
Indian stocks were the best performers in Asia yesterday after Vietnam, data compiled by Bloomberg show.
Still, the Sensex has retreated 22% from its November 5 peak, topping the 20% level that marks a so-called bear market for some investors. Companies on the gauge trade at 13.6 times estimated earnings, the lowest since April 2009, and down from 21.5 times March 2010.
The MSCI Emerging Markets Index is valued at a multiple of 9.6 times.
The Nifty index may rebound 7% after falling to its lowest level in 15 months, according to technical analysis by Angel’s Kulkarni and Edelweiss Financial Services Ltd
The rupee strengthened the most in three weeks on speculation a rebound in the benchmark stock index will encourage overseas funds to buy local equities.
The rupee advanced 0.2% to 45.68 per dollar at the 5pm close in Mumbai, according to data compiled by Bloomberg. It reached 46.09, the weakest since November 30.
The local currency reversed losses after earlier touching its lowest level since November as the Sensitive Index snapped a two-day drop. Exporters also probably sold dollars to benefit from the local currency’s weakness, said Sudarshan Bhatt, chief foreign-exchange trader at state-owned Corp Bank.
“The recovery in stocks provided support,” Mumbai-based Bhatt said. “Some investors may have thought the rupee had weakened too fast.”
