India’s benchmark gauge of equity options made its biggest weekly advance in seven weeks, signaling traders are increasing hedges before the quarterly earnings season starts next week.
The India VIX Index fell 1.1 percent to 14.26 at the close in Mumbai, after rising as much as 2.6 percent earlier. The gauge has risen 4.3 percent this week, the most since the period ended Feb. 22. The CNX Nifty index and the S&P BSE Sensex closed little changed on Friday, while posting weekly gains.
Indian companies will report results for the January-March quarter from this month, with Tata Consultancy Services Ltd., the nation’s largest software company, and IndusInd Bank Ltd., due to report on April 16. Earnings for the Sensex’s 30 companies decreased in the three months ended December for the first time in six quarters, data compiled by Bloomberg show.
“Investors are cautious ahead of the quarterly results as fourth-quarter earnings are likely to disappoint,” Nirakar Pradhan, chief investment officer at Future Generali India Life Insurance Co., which has $440 million in assets, said in a phone interview Friday. “We’re advising clients to buy on dips.”
Macquarie Capital Securities India Pvt, the most accurate index forecaster for the past two years in Bloomberg surveys, cut its earnings-per-share forecast for Sensex companies by 2.2 percent for the year through March 2016. Macquarie reduced its December-end target for the gauge by 4 percent to 31,600, Rakesh Arora, its head of research, said by e-mail on March 31.
Ambit Capital Pvt lowered its Sensex target for the year ending March to 34,000 from 36,000, and trimmed its earnings growth estimate to 16 percent from as much as 19 percent.
Global investors sold a net $43 million of local shares on April 8, paring this year’s inflows to $6.2 billion, still the most in Asia. They bought $16 billion of stocks last year.