India's Sensex Halts 3-Day Drop as Asian Stocks Gain on Fed Bets

  • Odds of Fed raising rates in 2015 drop to lowest since March
  • Tata Motors leads automakers on higher September sales

Indian stocks climbed for the first time in four days, led by automakers and industrials, as weak economic data from around the world reduced the odds of the U.S. Federal Reserve raising interest rates this year.

Tata Motors Ltd. surged the most in more than two years after its luxury unit Jaguar Land Rover reported an increase in September retail sales, while Maruti Suzuki India Ltd. rose the most in two weeks. Gail India Ltd., a natural-gas supplier, advanced to a two-month high. ITC Ltd., the largest tobacco company, rallied to a six-month high, while Hindustan Unilever Ltd., the largest home-products maker, fell after its earnings missed estimates.

The S&P BSE Sensex jumped 0.9 percent to 27,010.14 at close in Mumbai, ending three days of losses. The MSCI Asia Pacific Index rose for the first time in three days as all major Asian equity indexes advanced as the odds of the Fed raising borrowing costs in 2015 have fallen to the lowest since March. Global funds have bought $386 million of local shares so far this month, after pulling a combined $3.5 billion in August and September.

“There’s a little bit of optimism as surging liquidity is trying to find decent returns,”
Ajay Srivastava, managing director at Dimensions Consulting, told Bloomberg TV India Thursday. “Everything rests on global liquidity, and since there’s no sell off globally there is no need to panic for now.”

Tata Motors Options

Tata Motors jumped 8.2 percent to 381.3 rupees, the most since September 2013. Jaguar deliveries rose 22 percent to 10,394 units in September, following the introduction of the Jaguar XE sports saloon in May.

Outstanding put options, or bearish wagers, in the stock jumped to 19,313 as of 3:57 p.m. in Mumbai from 14,644 contracts on Wednesday, signaling that investors bought protection as the shares rallied. Put options with strike prices of 360 rupees and 350 rupees were the most popular by open interest.

Bharat Heavy Electricals Ltd., India’s top power-equipment maker, climbed 3.2 percent to 211.80 rupees. Maruti Suzuki rallied 3 percent to 4,377.40 rupees, the most since Sept. 29.

ITC gained 1.5 to 349.4 rupees and Hindustan Unilever lost 0.7 percent to 791.6 rupees.

International investors bought a net $50 million of Indian stocks on Oct. 13, taking this year’s inflows to $4 billion. The Sensex has retreated 1.8 percent this year and trades at 15.6 times projected 12-month earnings, compared with a multiple of 11.4 for the MSCI Emerging Markets Index.

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