Sensex Pares Biggest Weekly Loss in Four Years as Reliance Gains

  • Sugar producers fuel rally in midcaps on higher global prices
  • Reliance to replace L&T in CLSA Asia ex-Japan long-only list

India’s benchmark stock index pared its steepest weekly loss in more than four years and mid-cap companies rallied as Chinese equities rebounded after the government suspended a circuit-breaker system and the nation’s central bank moved to stabilize the yuan.

Bajaj Hindusthan Sugar Ltd. and Balrampur Chini Mills Ltd. jumped 10 percent each, pacing gains among makers of the sweetener. Tata Motors Ltd., owner of Jaguar Land Rover, was the top performer on the S&P BSE Sensex. Reliance Industries Ltd. rose after CLSA added the stock to its Asia ex-Japan long-only portfolio. Reliance Power Ltd. and Adani Power Ltd. helped the BSE India Power Index clock its biggest gain in three months.

The Sensex gained 0.3 percent at the close, narrowing its first weekly loss in four weeks to 4.7 percent, still the steepest since November 2011. The S&P BSE MidCap Index and a gauge of small-cap companies rebounded from its biggest declines in four months. Gains may fade even as Chinese authorities try to stabilize markets and Indian companies enter the quarterly reporting season next week.

“We’d be looking at the results season, which doesn’t give much hope, and then the federal budget, for a hint of some change in trajectory,” Ajay Srivastava, managing director at Dimensions Consulting, said in an interview with Bloomberg TV India on Friday. “We don’t have a good feeling about the budget either. The rally will be sold into.”

Yuan Fixing

Shanghai stocks rallied after Chinese policy makers decided to abandon a circuit-breaker system that was introduced to calm market volatility triggered an early close to trading twice this week. The central bank set the yuan’s reference rate little changed on Friday after an eight-day stretch of weaker fixings that roiled global markets.

Balrampur Chini surged the most since Nov. 18. Bajaj Hindusthan jumped the most since Oct. 21, while Dhampur Sugar Mills Ltd. rallied 11 percent. Raw-sugar futures for March delivery jumped 2.3 percent in New York on Thursday, ending a three-day slump. Global prices have rebounded about 40 percent since reaching a seven-year low in August.

Tata Motors rose 2.9 percent to pare the weekly loss to 12 percent, which is still the most on Sensex. Reliance increased 1.2 percent. Reliance Power gained 5.8 percent, while Adani Power surged 4.5 percent. NTPC Ltd., India’s biggest power producer, ended a five day drop with a 1.2 percent gain.

Sun Pharmaceutical Industries Ltd., the nation’s most valuable drugmaker, and ITC Ltd., India’s biggest cigarette company, both advanced 1.3 percent. Tata Consultancy Services Ltd., the largest software services exporter, increased 1.1 percent.

Global funds sold a net $17 million of Indian stocks on Jan. 7. They bought $3.3 billion of shares last year, the smallest amount in four years.

The Sensex dropped 5 percent last year, following a 30 percent jump in 2014, as euphoria over Prime Minister Narendra Modi’s economic agenda waned and concern grew that tighter U.S. monetary policy will curb the appeal of emerging-market assets. The 30-stock gauge trades at 14.9 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 10.6.

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