Bloomberg
Mumbai


India’s benchmark stock index rebounded from the lowest level in 15 months as industrial companies and lenders led a rally in the broader market amid gains in emerging-market equities.
Tata Steel jumped the most in 15 months, the second- best performance on a gauge of metal producers. GAIL India, a natural-gas supplier, had the steepest gain since June 2014, while NTPC, the largest power producer, advanced the most in two weeks. Axis Bank and ICICI Bank were among the best performers on the S&P BSE Sensex, while Housing Development Finance Corp, the biggest mortgage lender, climbed for a second day. The Sensex surged 1.7% to 25,317.87 at the close, after falling to its lowest level since June 2014 on Monday.
A gauge of 77 mid-cap stocks ended a two-day, 4.1% decline with 12 of 13 sectoral indexes advancing. A rout in emerging-markets assets has pulled the Sensex’s valuation to the cheapest level since May 2014 when Prime Minister Narendra Modi swept into office with the biggest mandate in 30 years. The index’s 14-day relative strength index fell to 29 on Monday, below the threshold level of 30 which investors see as a signal to buy.
“The market was oversold and this is a technical rebound,” Shishir Bajpai, a director at IIFL Wealth Management in Mumbai, which has $12bn under management and advisory, said in a phone interview. “The advance in regional markets helped. The uncertainty will continue until we see clarity over US interest rates.”
The MSCI Emerging Markets Index jumped 1.5%, its first gain in three days, as signs of slowing economic growth in China bolstered speculation of further state support and a Federal Reserve rate hike looked less likely this month. Data yesterday showed China’s exports fell 6.1% from a year earlier in yuan terms, while imports plummeted 14.3%, underscoring the fragility of global demand just one week before the Fed decides whether to raise borrowing costs.
International investors sold a net $120mn of Indian stocks on September 7, reducing the year’s inflow to $3.8bn. They pulled $2.6bn last month, the most since October 2008. The withdrawals brought the Sensex to within 5% of its close on May 16, 2014, when Modi’s Bharatiya Janata Party won the general elections.
Modi met billionaires, bankers and bureaucrats yesterday to discuss ways to bolster the economy as the country’s stocks and currency slide. The meeting concluded India’s fundamentals are reasonably strong, Finance Minister Arun Jaitley said in New Delhi yesterday.
Axis Bank soared 5.4%, the most since March 2. ICICI Bank climbed 4.7%, while State Bank of India gained 3.3%. Housing Development Finance added 1.4%. GAIL India surged 6.9%, the best performer on the Sensex. NTPC rose 1.6%.
Tata Steel surged 6%, the most since June 3, 2014. Steel Authority of India rallied 8.3%, the most since May 2014. Hindalco Industries added 1.6%. Vedanta surged 4.1%.
Meanwhile the rupee rose 0.4% to 66.5475 a dollar, according to prices from local banks compiled by Bloomberg.
The currency dropped to 66.8650 on Monday, the weakest level since September 2013.
India’s sovereign bonds rose, pushing the 10-year yield down by the most in a week, as an overnight retreat in oil prices raised optimism inflation will slow further.
The yield on government notes due May 2025 fell three basis points, the most since September 1, to 7.77% in Mumbai, according to prices from the central bank’s trading system.