Indian Stocks End Four-Day Retreat on Expiry, Stimulus Bets

Indian equities rose for the first time in five days ahead of a report tomorrow on the nation’s economic growth and a speech by U.S. Federal Reserve Chairman.

The BSE India Sensitive Index (SENSEX), or Sensex, increased 0.3 percent to 17,541.64, rebounding from an intraday drop of 0.7 percent, as investors closed bearish bets following the expiry of derivative contracts. Hindustan Unilever Ltd. (HUVR), the biggest home products maker, ITC Ltd. (ITC), the largest cigarette company, and Tata Consultancy Services Ltd. (TCS), the top software exporter, all rallied to a record.

Data tomorrow may show Asia’s third-largest economy grew 5.2 percent in the quarter ended June, the slowest pace since the three months ended in March 2009, according to a Bloomberg survey. Investors are speculating Fed Chairman Ben. S. Bernanke will announce a third round of quantitative easing during a speech tomorrow in Jackson Hole, Wyoming. Indian futures and options contracts expire on the last Thursday of every month.

“Traders cut short positions on expiry amid expectation of local and global stimulus measures,” Aditya Agarwal, head of derivatives at Way2Wealth Brokers Pvt., said by telephone. “Fewer bearish bets were rolled over to the next series as Fed may announce quantitative easing.”

Rollovers in the 50-stock S&P CNX Nifty Index futures were at 56.3 percent at 4:25 p.m., compared with 70 percent in July, according to data compiled by Bloomberg.

The Sensex has still risen 14 percent this year, helped by the biggest overseas equity investments among 10 Asian markets tracked by Bloomberg. Foreign funds bought a net $30 million of stocks on Aug. 28, the 21st day of purchases, pushing up their investments this year to $11.8 billion, data from the regulator show. That’s the longest stretch of net buying since a record 41-day streak through Oct. 27, 2010, Bloomberg data show.

To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net; Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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