Bloomberg/Mumbai
Indian stocks advanced, with the benchmark gauge capping a weekly gain, tracking an increase in Asian equities as signs of stabilisation in China’s manufacturing activity lifted demand for riskier assets.
Sun Pharmaceutical Industries, the nation’s most valuable drugmaker, climbed for a second day. Lupin jumped to a record. Tata Consultancy Services and Infosys, the top software exporters, rose to a six-week high. Larsen & Toubro, the most valuable engineering firm, rebounded for a third day after falling to a one-year low.
The S&P BSE Sensex gained 0.3% to 26,220.95 in Mumbai. The gauge has risen 1.4% this week after the central bank cut its benchmark rate on Tuesday by more than economists’ forecast. China’s factory gauges showed slower-than-estimated contraction, easing concerns about a slowdown that erased about $10tn from global stock values in the quarter ended September.
“There’s some sanity returning to the global markets,” Aneesh Srivastava, who manages $700mn as chief investment officer at IDBI Federal Life Insurance, said by phone. “Global sentiments drove the emerging-markets selloff, which impacted India despite the nation having a better growth outlook. Those headwinds are behind us.” Srivastava said he favours lenders, infrastructure and engineering companies.
Lupin surged 3.7%, taking this year’s gains to 48%, the most on the Sensex. Sun Pharmaceutical gained 2.6%. Infosys added 1%, extending this year’s gains to 19%. TCS increased 2.2% to its highest level since August 21. Larsen rose 1.6%.
HCL Technologies, the fourth-largest Indian software exporter, plunged 13%, the most since January 2009, after it said currency and certain client issues are likely to hurt revenue growth in the quarter through September. HCL is considering setting aside as much as $20mn for the quarter “as a matter of prudence” because of differences with a client over the objectives of a contract, the company said in an exchange filing.
Maruti Suzuki India tumbled 2.3% after September sales grew at the slowest pace since June. Bharat Heavy Electricals dropped 3%, the worst performer on the gauge yesterday.
International investors sold a net $168mn of Indian stocks on September 29, paring this year’s inflow to $3.6bn, still the largest among eight Asian markets tracked by Bloomberg.
The Sensex has fallen 4.7% this year and trades at 15 times projected 12-month earnings, versus the MSCI Emerging Markets Index’s multiple of 10.7.
Meanwhile, the rupee strengthened 1% this week to 65.5125 a dollar in Mumbai, according to prices from local banks compiled by Bloomberg. It rose 0.1% yesterday. The currency climbed 1.4% in September in its biggest monthly advance since January.
