Indian Stocks Gain as Rupee Pares Losses; Drugmakers Advanceby
Indian stocks gained in late trade, led by health-care companies, as the rupee rebounded from near a record low and European equities advanced.
Sun Pharmaceutical Industries Ltd. and Dr. Reddy’s Laboratories Ltd. were among the best performers on the S&P BSE Sensex. Adani Ports & Special Economic Zone Ltd. posted its biggest three-day advance in seven years. Reliance Industries Ltd., owner of the largest refining complex, climbed to a one-week high.
The Sensex added 0.8 percent at the close, reversing an intraday loss of 1.2 percent. The rupee strengthened after falling within 0.2 percent of a record low. The currency has been Asia’s worst performing currency over the past month as global funds pulled $2.4 billion from local equities amid an emerging-markets selloff. The Stoxx Europe 600 Index gained 2 percent in London, while futures pointed to advance in U.S. shares.
“In the past decade, Indian stock markets have bottomed out after the rupee,” Mehraboon Irani, head of private-client group at Nirmal Bang Securities Ltd., said in an interview with Bloomberg TV India on Wednesday. “The stock market is somewhere near the bottom but let’s wait for one more crack in the rupee.”
The rupee dropped 0.1 percent to 68.4675 per dollar after coming within 0.2 percent of an unprecedented 68.845 reached in August 2013. A drop in the currency to 69.70 followed by a period of stability will mark “the bottom for the stock market,” Irani said.
Foreigners withdrew $1.7 billion from local shares in January after buying $3.3 billion of stocks last year, the smallest amount since 2011. The Sensex has plunged 10.5 percent this year and trades at 14.6 times its projected 12-month earnings, near the cheapest since May 2014.
Sun Pharmaceutical rallied 3.4 percent to 855.80 rupees. Dr Reddy’s rose 3.7 percent to 2,960.70 after the company said it will buyback around 4.48 million shares, or about 2.6 percent of its capital. Adani Ports advanced 6.1 percent to 212.50 rupees. Reliance Industries added 2.4 percent. Tata Motors Ltd. climbed 3 percent.