Indian equities climbed after the biggest slump in the benchmark index in 21 months lured some investors and as the rupee rebounded from a record low.
The S&P BSE Sensex added 0.3 percent to 18,774.24 at the close in Mumbai after slumping 2.7 percent yesterday, the most since Sept. 22, 2011. The measure lost 2.1 percent this week, a third week of losses. The gauge’s 10-day volatility climbed to a 14-month high and volume was 47 percent more than the 30-day average. Oil & Natural Gas Corp. had the sharpest gain in two months. Infosys Ltd. increased the most in three weeks.
More than $1.8 trillion was wiped out from global equity values yesterday after Fed Chairman Ben S. Bernanke said bond buying that has fueled gains in markets globally may be pared this year should risks to the U.S. economy continue to ebb. The selloff dragged the Sensex’s valuations to 12.8 times projected 12-month profits, the cheapest since April. The rupee advanced 0.6 after tumbling to a record low.
“Low valuations are making equities attractive from a long-term view,” Nirakar Pradhan, who manages $590 million as chief investment officer at Future Generali Life Insurance in Mumbai, said in a phone interview. “The rupee rebound provided some comfort to investors.”
The rupee gained 0.5 percent to 59.2675 per dollar at the close, completing its biggest weekly loss since September 2011. The currency, which touched a record low of 59.98 yesterday, may strengthen to 59 a dollar “in a few days” as the sell-off seems excessive and on speculation the Reserve Bank of India will intervene, according to HDFC Bank Ltd.
ONGC jumped 2.8 percent to 307.8 rupees, the steepest gain since April 16. Infosys climbed 2.1 percent to 2,418.75 rupees, while rival Tata Consultancy Services Ltd. added 1.3 percent to 1,422.25 rupees, the most since June 7.
Maruti, Dr. Reddy’s
Maruti Suzuki India Ltd. led automakers higher, increasing 1.9 percent to 1,554.65, the highest level since June 7. Hero MotoCorp Ltd. rose 1.5 percent to 1,625.95 rupees, the most since May 29. Mortgage lender Housing Development Finance Corp. added 0.4 percent to 820.7 rupees. Dr Reddy’s Laboratories Ltd. advanced 2.1 percent to 2,121.4 rupees.
Foreign funds have withdrawn $760 million from domestic shares and $3.9 billion from rupee debt this month, the data show. A net foreign outflow of $358 million from shares on June 20, the highest in 21 months, pared this year’s purchases to $14.3 billion, data compiled by Bloomberg show.
The 50-stock CNX Nifty slumped 0.2 percent to 5,667.65. Its June futures settled at 5,661.85. India VIX, which gauges the cost of protection against losses in the Nifty, fell 0.8 percent, ending three days of gains.