BackSensex rebound as Asian shares climb on stimulus bets
Sensex and Nifty close 2% higher, posting their biggest single-day percentage gain since 5 October 2015
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Mumbai: Indian stocks rose as Asian equities rebounded and technical indicators signalled the rout that dragged the nation’s benchmark gauge close to a bear market was overdone.
NTPC Ltd., the nation’s largest power generator, climbed the most in three weeks. GAIL India Ltd., the biggest natural- gas supplier, had the steepest gain in a month. Maruti Suzuki India Ltd. climbed from a seven-month low. ITC Ltd., the top tobacco company, dropped for a fourth day ahead of its results Friday.
The S&P BSE Sensex jumped 1.7% at 11:36am in Mumbai, the most since 5 October, as the potential for an expansion in central bank stimulus and a recovery in oil helped the MSCI Asia Pacific Index climb from a 3 1/2-year low. The Sensex came within 0.5% of entering a bear market on Thursday as foreigners sold more local shares amid concern about global growth.
“We’re seeing an opportunistic rally after the market shake down," Ajay Srivastava, managing director at New Delhi-based Dimensions Consulting Pvt., said in an interview with Bloomberg TV India. “The outlook remains foggy. We’re playing on the safe side by not taking many short or long positions."
The Sensex closed below 24,000 level on Thursday for the first time since Prime Minister Narendra Modi’s party swept to power on 16 May 2014, as global funds pulled $1.4 billion from local shares this month. The gauge has slid 19.3% from its January 2015 peak through Thursday, near the 20% threshold for a bear market. It’s relative strength index sank below the 30 level that some analysts say signals a rebound is imminent.
Earnings scorecard
Idea Cellular Ltd.tumbled 7% to its lowest price since April 2013, the worst performance on the S&P BSE 100 Index. The company said after market hours its third-quarter profit fell to Rs764 crore ($112 million) from Rs767 crore. That missed the Rs796 crore estimated by analysts.
ITC lost 0.3%. The company may report third-quarter net income of Rs2,760 crore, according to the median estimate of 28 analysts in a Bloomberg survey.
So far, four of the five Sensex companies that have reported earnings for the December quarter have beaten estimates. Fifty-seven percent of Sensex companies in the September quarter posted earnings that matched or beat estimates, versus 60% in June, data compiled by Bloomberg show.
The Sensex is valued at 14.7 times projected 12-months earnings, compared with a multiple of 10.3 for the MSCI Emerging Markets Index. Bloomberg
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