India's Sensex Ends Four Weeks of Decline Before Factory Output

Indian equities ended four weeks of losses in volatile trade as investors awaited monthly factory production data and concerns eased that China’s financial-market turmoil will derail global growth.

State Bank of India and Bank of Baroda rose more than 1 percent each. Wipro Ltd. and Infosys Ltd. added at least 1 percent, leading software companies higher. Vedanta Ltd. lost 2.8 percent. Bharat Heavy Electricals Ltd., India’s biggest power-equipment maker, declined for the first time four days. Tata Motors Ltd. and Tata Steel Ltd. were the top performers on the S&P BSE Sensex this week.

The Sensex declined less than 0.1 percent to 25,610.21 at the close after swinging between a gain of 1 percent and a loss of 0.4 percent. The gauge climbed climbed 1.6 percent this week, ending its longest stretch of weekly losses since October, before the Federal Reserve’s interest-rate decision next week. The government will on Friday probably say factory output rose 3.6 percent in July, according to the median of 33 analyst estimates in a Bloomberg survey. It increased 3.8 percent in June.

“Large macro factors are in India’s favor, with the drop in commodity prices and inflation, and we’re still in positive territory in terms of outlook for the economy,” Taher Badshah, co-head of equities at Motilal Oswal Asset Management Co., which has $413 million in assets, said in an interview with Bloomberg TV India on Friday. “Foreign selling has also abated a bit and we remain supported by local inflows.”

Outflows

Withdrawals by overseas investors have fallen to an average $93 million a day so far this week, from last week’s mean of $127 million, data compiled by Bloomberg show. They withdrew $2.6 billion in August, the worst outflow since October 2008. Local funds have bought a net $87 million of shares so far this month, extending last month’s purchases of $2.4 billion, the data show.

Hong Kong’s gauge of Chinese stocks gained 6 percent this week, the most since April 10. The Shanghai Composite Index advanced 1.3 percent this week amid reassurance from Premier Li Keqiang that authorities have sufficient tools to prop up the economy should growth fall below their desired level.

State Bank gained 1.2 percent. Bank of Baroda rose 1.3 percent. Housing Development Finance Corp., the largest mortgage lender, added 1.2 percent. Wipro gained 1.3 percent and Infosys advanced 1 percent to a one-week high.

Vedanta lost 2.8 percent, taking this year’s loss to 55 percent. Tata Steel tumbled 3 percent, paring this week’s gains to 6.4 percent. Bharat Heavy Electricals fell 2.9 percent. Tata Motors slid 2.7 percent, paring this week’s advance to 6.7 percent, the most on the Sensex.

The Sensex trades at 14.6 times projected 12-month earnings, compared with a multiple of 10.7 for the MSCI Emerging Markets Index. The CNX Nifty Index was little changed at 7,789.30.

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