Indian stocks climbed, led by metal producers and automakers, after a drop in the benchmark index to a four-month low attracted some investors.
Tata Steel Ltd. rebounded 4.8 percent from a three-month low, helping an industry gauge end two days of losses. Mahindra & Mahindra Ltd. added 2.9 percent, sending the S&P BSE India Auto Index to its steepest gain in more than a month. Drugmaker Ranbaxy Laboratories Ltd. rose the most in two months after its fourth-quarter loss narrowed from a year earlier.
The S&P BSE Sensex rose 0.2 percent to 20,261.03 at the close, erasing a 0.7 percent intraday loss. The Sensex trades at 12.7 times projected 12-month profits, the cheapest since August, after retreating 4.3 percent this year amid a selloff in global equities. Asian stocks climbed, with the regional benchmark index paring its biggest slump since June, after U.S. equities rebounded as investors assessed corporate earnings.
“We had a pullback as lower valuations lured investors,” Arun Kejriwal, a director with Kejriwal Research & Investment Pvt., said by phone in Mumbai today. “There’s no major negative locally, and global markets are supportive.”
The Sensex is off to its worst start to the year since 2011 amid a selloff in emerging-market stocks triggered by China’s economic slowdown and reduced monetary stimulus in the U.S. Foreigners have sold a net $146 million of Indian stocks this year, after buying $20 billion worth of equities in 2013, the most in Asia after Japan, data compiled by Bloomberg show.
Tata Steel had the steepest climb since Nov. 14, the top performer on the Sensex. Aluminum producer Hindalco Industries Ltd. gained 1.8 percent, ending a two-day, 6.5 percent decline.
Mahindra climbed the most since Dec. 20. The S&P BSE India Auto Index had the biggest gain in six weeks. Tata Motors Ltd., owner of Jaguar Land Rover, rose 2.7 percent, the second-best performer on the Sensex.
Ranbaxy surged 5.7 percent, the most since Dec. 2, amid volumes that were 4.5 times the three-month daily average. The company’s fourth-quarter group loss narrowed to 1.59 billion rupees ($25.5 million) from 4.92 billion rupees a year ago. The company would have posted a profit but for a 2.57-billion rupee inventory write-off, according to an exchange filing. Sales increased 7 percent to 28.6 billion rupees.
Tech Mahindra Ltd., a software maker, jumped 3.9 percent after its third-quarter profit jumped more than threefold. The company reported group net income of 10.1 billion rupees versus 2.76 billion rupees a year earlier. That beat the 6.9 billion rupees estimated by analysts.
Fifteen out of 19 Sensex members that have posted earnings for December quarter so far have exceeded or matched analyst estimates. The CNX Nifty Index added 0.4 percent to 6,022.40. The India VIX gained 1.3 percent.