Sensex Rebounds From Four-Month Low as India’s Bharti Rallies

Feb. 4 (Bloomberg) -- Most Indian stocks climbed after the benchmark index rebounded from its lowest level in four months as some investors judged the losses excessive.

Bharti Airtel Ltd., India’s largest mobile-phone operator, was the biggest gainer on the S&P BSE Sensex. Power generator NTPC Ltd. climbed the most since August. Tata Motors Ltd., the owner of Jaguar Land Rover, rallied from a four-month low.

Sixteen stocks climbed and 13 dropped on the Sensex, which rose less than 0.1 percent to 20,211.93 at the close. The gauge slid 1.2 percent intraday to its lowest level since Oct. 9 amid a rout in global equities. The index’s 14-day relative strength index fell to 28.3, below the 30 level that some trades take as signal an asset is oversold. Emerging-market stocks slid to a five-month low as weaker-than-expected manufacturing data from China to the U.S. spurred concern global growth will falter.

“We are not confident that the recovery we saw today will continue as triggers for the our markets are limited,” Sonam Udasi, head of research at IDBI Capital Market Services Ltd., said in an interview to Bloomberg TV India. “We should trade downward as we go into the the month.”

Bharti jumped 3.4 percent, the biggest gain since Dec. 17. Reliance Communications Ltd., the second-largest mobile-phone operator, climbed 2.8 percent and Idea Cellular Ltd. soared 7.9 percent, the most since July 31.

Spectrum Auction

India got bids worth 446.1 billion rupees ($7.12 billion) on the first day of a wireless spectrum auction yesterday, the third effort by the government to raise revenue from the sale of airwaves in the last 15 months. Eight companies, including billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd., Bharti and Vodafone Group Plc, are competing for two bandwidth slots in 22 regional zones, according to a government statement.

NTPC added 3.3 percent, the most since Dec. 6. Tata Motors jumped 2.8 percent, ending two days of declines. Hindalco lost 1.3 percent, extending yesterday’s 5.6 percent plunge. Sesa Sterlite Ltd. dropped 1.6 percent.

Tata Consultancy Services Ltd., the nation’s top software exporter, tumbled 2 percent to its lowest level since Dec. 26. Infosys Ltd., the second-largest, declined 1.9 percent. Wipro Ltd., the third-biggest, fell 1.9 percent.

The MSCI Asia Pacific Index dropped 1.3 percent to 914.84, the lowest level since Aug. 29, at 11 a.m. in London. The gauge is off to the worst start of a year on record amid an equities selloff that’s erased about $2.9 trillion from global stocks in 2014. Foreign funds sold a net $93 million of Indian shares on Jan. 31, capping the first monthly outflow since August, data compiled by Bloomberg show. They pulled a net $133 million from shares yesterday, the data show.

Profit Forecasts

The Sensex retreated 3.1 percent last month, the steepest monthly decline since August. The gauge trades at 12.7 times estimated 12-month earnings, the cheapest since August.

India’s stock analysts are increasing profit forecasts for Sensex companies at the fastest pace since 2007 amid growing confidence that Asia’s third-largest economy will rebound from a decade-low expansion.

Projections for profit growth for the next 12 months rose 9 percent last quarter, the most since end-2007, and by another 0.5 percent in January, data compiled by Bloomberg show. Analysts predict a 32 percent profit gain for companies in the Indian gauge in the next 12 months, versus 20 percent for the MSCI Emerging Markets Index.

Fourteen out of 18 Sensex companies that have reported for the December quarter so far have exceeded or matched analyst estimates.

The CNX Nifty Index declined less than 0.1 percent to 6,000.90. The India VIX gained 2.3 percent.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net