Indian (SENSEX) equities climbed, with the benchmark index rebounding from a seven-month low, after some investors judged recent declines excessive.
The S&P BSE Sensex surged 1 percent to 18,414.45 at the close in Mumbai, after changing directions at least nine times. Software maker Wipro Ltd. (WPRO) jumped 2.2 percent after tumbling the most in more than four years yesterday. Infosys Ltd. gained 1.8 percent before its earnings on April 12. Housing Development Finance Corp. (HDFC), the nation’s largest mortgage lender, ended a seven-day losing streak.
The Sensex dropped for a fifth day yesterday as concerns company earnings will weaken amid the slowest pace of economic growth in a decade prompted foreign funds to trim this year’s stock purchases. The decline dragged the gauge’s valuation to 12.4 times projected 12-month profits, near the lowest level since June, data compiled by Bloomberg show.
“Value is emerging around these levels,” A.K. Prabhakar, senior vice president of equity research at Mumbai-based Anand Rathi Financial Services Ltd., said by phone. “The market is near a major support. We expect a rally in the next few days.”
Infosys, the nation’s second-largest software maker, will report earnings on April 12, kicking off the reporting season for the March quarter. Net income at about 43 percent of the 30 Sensex firms trailed forecasts in the three months ended Dec. 31, compared with 40 percent in the previous two quarters.
Wipro jumped 2.2 percent to 402.25 rupees. Infosys (INFO) added 1.8 percent to 2,815.65 rupees. Larger rival Tata Consultancy Services Ltd. (TCS) increased 2.2 percent to 1,530.45 rupees. Housing Development Finance surged 4 percent to 783.15 rupees, ending a seven-day 9 percent losing streak.
India’s economy grew 4.5 percent from a year earlier in the last quarter of 2012, the weakest pace since 2009, and the government forecasts an annual growth rate of about 5 percent, the least in a decade. The nation’s current-account deficit is at a record and its inflation rate is the fastest among major emerging nations.
Foreigners sold a net $114 million worth of local shares on April 9 in a sixth day of outflows, the longest stretch of withdrawals since May, data compiled by Bloomberg show. They have invested a net $10.1 billion in domestic equities this year, the data show. Inflows last year totaled $24.5 billion, the most among 10 Asian markets tracked by Bloomberg.
“Selling by foreign funds in the past few sessions has put investors on their guard,” Arun Kejriwal, director at Mumbai- based Kejriwal Research & Investment Services, said by telephone. “We saw a dead cat bounce today but the underlying mood remains cautious.”
Volumes on the Sensex were 27 percent below the 30-day average and the gauge’s 50-day volatility climbed to 12.47, the highest reading since Nov. 27, data compiled by Bloomberg show.
The 50-stock CNX Nifty Index rose 1.2 percent to 5,558.70. Its April futures settled at 5,553.70. India VIX, which gauges the cost of protection against losses in the Nifty, slid 2 percent to 16.49.
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