Indian stocks advanced, tracking Asian and European peers, as investors waited for European Central Bank President Mario Draghi to give details of his plan to stem the region’s debt crisis.
The BSE India Sensitive Index, or Sensex, rose 0.2 percent to 17,346.27 at the close. Infosys Ltd., the second-largest software maker by value, jumped the most since October, leading gains among peers. Tata Motors Ltd., the owner of Jaguar Land Rover, climbed the most in two weeks.
Draghi will propose unlimited buying of government debt, while refraining from a public cap on yields, according to two central bank officials briefed on the plan before the bank’s meet today. The European Union, India’s top trading partner, took in 17 percent of the nation’s exports in the six months ended September 2011, government data show.
“Markets will wait for cues from policy meetings in Europe before making a decisive move,” Aneesh Srivastava, chief investment officer with Mumbai-based IDBI Federal Life Insurance Co., which has $470 million in assets, said by phone.
The Stoxx Europe 600 Index jumped 0.8 percent in London. The measure has surged 14 percent from this year’s low on June 4 as Draghi pledged to do everything possible to preserve the euro. Standard & Poor’s 500 Index futures added 0.5 percent and the MSCI Asia Pacific Index rose for the first time in six days.
The Sensex has advanced 12 percent this year, helped by the highest foreign flows among 10 Asian markets excluding China tracked by Bloomberg. Overseas funds bought a net $54.5 million of stocks on Sept. 4, taking their investment this year to $12.3 billion, data from the market regulator show.
The 30-stock Sensex has slid 0.5 percent this week. It fell 2 percent last week, the most since the week ended May 11. The gauge trades at 13.7 times estimated earnings, compared with a multiple of 10.7 times for the MSCI Emerging Markets Index, which has advanced 2.9 percent in 2012.
India may attract as much as $40 billion in two years from individual investors overseas after Prime Minister Manmohan Singh’s government allowed them to directly access Asia’s fifth-biggest stock market, Thomas Mathew, who took over as the joint secretary to President Pranab Mukherjee this week, said in a phone interview yesterday.
“Money which will come from this route will stay invested for longer periods of time” than that from foreign funds, said Mathew. Investors from U.S. and Europe have already started opening accounts and trading under the new program, he said.
India’s government on Jan. 1 allowed qualified foreign investors, including individuals and groups or associations, to invest in local equity markets. Previously, only overseas institutions, their sub-accounts, and non-resident Indians were allowed to buy shares.
Infosys rallied 3.5 percent to 2,422 rupees, its biggest gain since Oct. 12. Smaller rival Wipro Ltd. surged 4.2 percent to 377.45 rupees, its biggest advance since Jan. 3.
Tata Motors climbed 1.9 percent to 233.05 rupees, the most since Aug. 21. Banks recouped some of their losses from yesterday. ICICI Bank Ltd., the biggest private lender, jumped 1.9 percent to 896.45 rupees after losing 3.6 percent yesterday, and larger rival State Bank of India rose 1.3 percent to 1,853.95 rupees after dropping 2.4 percent yesterday.
Bharti Airtel Ltd., the biggest cell-phone operator, sank 2.2 percent to 252.10 rupees. Competition Commission of India, the antitrust regulator, is looking into allegations of monopolistic behavior in the cable-landing stations market, the Hindu BusinessLine reported, without saying where it obtained the information.
India VIX, which measures the cost of protection against losses in the S&P CNX Nifty Index, fell 0.2 percent to 16.98. The Nifty added 0.2 percent to 5,238.40 while its September futures settled at 5,261.10. The BSE-200 Index added 0.3 percent to 2,116.37. The top two bourses traded 705 million shares yesterday, compared with a 12-month daily average of 886 million shares.