Indian stocks advanced, with the benchmark gauge rebounding from its biggest loss in a month, as lenders and metal producers climbed. ICICI Bank, the country’s biggest private lender, climbed to a two-week high. The stock was the best performer on the S&P BSE Bankex, which jumped 1.4%. Tata Steel rallied to a four-month high, while Oil & Natural Gas Corp, the largest state-owned explorer, increased to its highest price in nearly three weeks.
The S&P BSE Sensex gained 0.9% at the close in Mumbai after posting its steepest drop since November 18 on Friday. The gauge still halted two weeks of losses after the Federal Reserve raised US interest rates for the first time in nearly a decade, ending a period of uncertainty. The Sensex has retreated in the month only twice in the past decade, data compiled by Bloomberg show.
“We have all the reason to remain bullish until Dec 31 as there will be some sort of net asset value-management in the large caps before the year ends,” Ashish Maheshwari, a director at Blue Ocean Strategic Advisors Pvt, said in an interview with Bloomberg TV India. The Fed’s decision has been “priced in,” he said.
ICICI Bank rallied 3.2%, reducing this year’s loss to 27%. Axis Bank rose 2.3%, ending two days of declines. State Bank of India climbed 1.7%. The Bankex rose to its highest level since December 8.
Tata Steel increased to its highest level since August 10, while Oil & Natural Gas rallied 3.2%, trimming this year’s loss to 33%.
Sun Pharmaceutical Industries, India’s biggest drug maker, tumbled 4.6%, the most since November 9, after it got a warning letter from the US Food and Drug Administration following an inspection at one of its facilities. HSBC Holdings Plc cut the stock’s rating to hold from buy, while Morgan Stanley reduced it to equal-weight from overweight.
Sun received the FDA warning as a result of the inspection in September 2014 at its Halol facility in India’s Gujarat state, the drug maker said in a statement on Saturday. The FDA has withheld future product approvals from this facility. Sun expects to seek a re-inspection by the FDA on completing its “remediation commitments,” according to the filing.
International investors bought a net $113mn of Indian stocks on December 17, taking this year’s inflows to $2.8bn. The Sensex has fallen 6.4% this year and trades at 15.2 times projected 12-month profits, versus 11.1 times for the MSCI Emerging Markets index.
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