India's Nifty Futures Climb as Foreigners Extend Stock Purchases

Indian stocks advanced for a second day in thin trading, with automakers helping the benchmark index climb to a four-week high.

Bajaj Auto Ltd. and Hero MotoCorp Ltd., the biggest motorcycle makers, and Mahindra & Mahindra Ltd., the nation’s largest tractors company, were the top percentage gainers on the S&P BSE Sensex. Hindustan Unilever Ltd. retreated from a four-month high. Bharat Heavy Electricals Ltd., a government-controlled power-equipment maker, fell the most in three weeks.

The Sensex increased 0.2 percent at the close in Mumbai, while the Nifty 50 Index rose less than 0.1 percent, with trading volume in stocks on the gauge 23 percent below the 30-day average. Overseas investors bought a net $75 million of Indian stocks on Dec. 23, a fifth day of purchases that helped pare this quarter’s withdrawals to less than $600 million. December month equity-derivative contracts are due to expire on Thursday.

“Buying by foreign investors has shored up the indexes,” D.K. Aggarwal, chairman of SMC Investments Pvt. in New Delhi, said by phone. “The indexes may trade in a range, given the volatility around expiry.” Aggarwal said he’s recommending clients buy power, software and banking companies.

Traders have replaced 44 percent of current month futures with January contracts, data compiled by Bloomberg show.

Mahindra & Mahindra rose 1.2 percent, the most in a week. Bajaj Auto was the top gainer on the Sensex, climbing 1.5 percent. Hero MotoCorp added 0.8 percent to pare this year’s loss to 12 percent.

Hindustan Unilever lost 0.9 percent, the most since Dec. 8. Bharat Heavy tumbled 1.7 percent to extend this year’s slide to 36 percent. Coal India Ltd., the world’s biggest producer of the fuel, decreased 1.2 percent.

The Sensex has fallen 5.2 percent in 2015, poised for its worst annual performance in four years. It trades at 15.6 times projected 12-month earnings, compared with a multiple of 10.9 for the MSCI Emerging Markets Index.

Before it's here, it's on the Bloomberg Terminal.