Indian Stocks Erase Losses as Drugmakers Climb on Europe Reboundby
Dr. Reddy's Laboratories, Lupin among biggest Sensex gainers
Global Funds buy $44.4m of shares Monday, pare monthly outflow
Indian stocks gained for a second day, with the benchmark gauge erasing an earlier loss, as drugmakers and engineering companies climbed amid advances in global equities.
Dr. Reddy’s Laboratories Ltd. surged the most in two months, while Lupin Ltd. rose for a second day. Larsen & Toubro Ltd. and Bharat Heavy Electricals Ltd., producers of capital goods, were among the biggest gainers on the S&P BSE Sensex. Jain Irrigation Systems Ltd. and EPC Industrie Ltd., makers of farm equipment, increased to four-month highs.
The Sensex rose 0.3 percent at the close in Mumbai after Monday’s 1.8 percent advance. The gauge wiped an intraday loss as investors used the decline to buy drugmakers and companies most-tied to the economy, said Anita Gandhi, director at Arihant Capital Ltd. in Mumbai. A rebound in European stocks aided the recovery, she said.
“Capital-goods stocks are being accumulated over past few days as core sector growth is improving, while pharma stocks are looking attractive after the recent declines,” Gandhi said. “Sentiment also got a boost from the positive opening in the European markets.”
Global funds bought $44.4 million of local shares on Monday, paring this month’s outflow to $41 million. Inflows have slowed after reaching a combined $4.7 billion in March and April as pessimism over the pace of global growth cooled demand for riskier assets.
Earnings in the world’s fastest-growing major economy seem to be recovering after the worst run since the global financial crisis. Seven out of 12 Sensex firms that have posted March-quarter results so far beat or matched estimates.
The Sensex has slid 1.3 percent this year and trades at 15.9 times 12-month projected earnings versus 11.3 for the MSCI Emerging Markets Index.