India’s Sensex Climbs as Automakers, Software Exporters Advance

Indian equities increased, led by industrials and software services companies.

Tata Motors Ltd. rose the most in two months after its quarterly profit tripled. Tata Steel Ltd. gained to its highest level in three weeks before its earnings report. Infosys Ltd. gained for a third day, helping a gauge of software exporters to its biggest gain in about a month.

The S&P BSE Sensex added 0.1 percent to 20,363.37 at the close. About 77 percent of the 22 Sensex companies that have posted earnings for the December quarter so far have exceeded or matched estimates, compared with 70 percent in the previous quarter and 47 percent in the three months ended June, data compiled by Bloomberg show. A government report showed the trade gap narrowed last month, and data due tomorrow may show price gains and a contraction in factory output slowed, according to Bloomberg surveys of economists.

“For two straight quarters, earnings have been better than estimates,” Rakesh Arora, head of research at Macquarie Capital Securities (India) Pvt., said in a Bloomberg TV India interview today. “There are enough signs that the investment cycle has bottomed out.”

Tata Motors jumped 2.9 percent, the most since Nov. 25 and the top performance on the Sensex today. Profit surged to 48.1 billion rupees ($771 million) in the quarter ended Dec. 31, the company said after markets closed yesterday. That exceeded the 35.1 billion-rupee median in a Bloomberg survey.

Tata Steel rose to 389.75 rupees, the highest close since Jan. 22. The company may report profit of 6.68 billion rupees, according to the median estimate of 27 analysts in a Bloomberg survey. That compares with a loss of 7.63 billion rupees in the same period last year. The stock has climbed 9.5 percent so far this month, after tumbling 16 percent in January.

Infosys, Dr. Reddy’s

Infosys gained 0.6 percent to 3,596.25 rupees. The S&P BSE Infotech Index jumped 1 percent, the most among the 13 sectoral indexes compiled by the BSE Ltd. Dr. Reddy’s Laboratories Ltd. lost 0.4 percent from a record. The drugmaker’s profit climbed to 6.18 billion rupees from 3.63 billion rupees a year earlier, higher than the 5.3 billion estimate in a Bloomberg survey.

Reliance Industries Ltd. dropped to a five-month low after Delhi Chief Minister Arvind Kejriwal said he will file a police complaint against the owner of the largest refining complex, its billionaire Chairman Mukesh Ambani and oil minister Veerappa Moily for creating an artificial shortage of gas in the country and raising prices. Tushar Pania, a Mumbai-based spokesman at Reliance, declined to comment on the allegations.

‘Passing Phase’

The Sensex has fallen 3.8 percent this year amid a selloff in emerging-market stocks triggered by China’s economic slowdown and reduced monetary stimulus in the U.S. Overseas funds have sold $297 million of local shares this year, after buying $20 billion worth of equities in 2013, the most in Asia after Japan, data compiled by Bloomberg show.

“The selloff by foreigners is a passing phase and it is due to the U.S. taper,” Vikas Khemani, president and head of institutional equities at Edelweiss Securities Ltd. in Mumbai, said in an interview. “Foreigners remain bullish on the long-term India story. Inflows will increase if a strong and stable government comes to power after the elections.”

Foreigners now represent 65 percent of all institutional ownership, a record, according to a Credit Suisse Group AG note today. Inflows “as a technical signal for the markets thus become more important,” the note said.

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