The rupee slipped 0.1% to 66.0350 a dollar yesterday

Bloomberg
Mumbai

Indian stocks rose for a second day, helped by fading concern about the fallout from the attacks in Paris, with sugar producers and tobacco companies pacing advances.
Shree Renuka Sugars rallied the most in more than seven years, while rival EID Parry India surged the most since May 2009 after a report that the government may give subsidy to cane growers. ITC, the biggest cigarette company, rose the most in five weeks, while Godfrey Phillips India rallied to a record. Vedanta, the largest copper producer, climbed to a one-week high and Tata Steel gained for a fourth day.
The S&P BSE Sensex index rose 0.4% to 25,864.47 at the close in Mumbai, while a gauge of 500 companies capped its biggest two-day gain in a month. The Sensex climbed Monday after three weeks of declines sent its 14-day relative-strength index to a level that’s considered to be oversold. The gains may recede as investor focus shifts to the possibility of the US Federal Reserve raising interest rates in December, according to Crest Wealth Management.
“We’ve moved from a bottom to an intermediate uptrend but there’s no immediate trigger to give you the confidence to buy en masse,” Lancelot D’Cunha, chief executive officer at Crest, said by phone from Mumbai. “There will be a decline if the Fed hikes in December.” D’Cunha said he’s advising clients to buy financial services and engineering companies.
Emerging-market stocks recouped from a six-week low, joining a rebound in global markets after the Standard & Poor’s 500 Index gained 1.5% on Monday. The US stocks gauge had fallen on seven of the previous eight days after Federal Reserve Chair Janet Yellen said policy makers’ December meeting was a “live possibility” for a rate increase and signs increased that growth overseas was slowing.
Shree Renuka soared 19%, the most since July 2008. The stock has more than doubled since October 1. EID Parry soared 9.4%, while Bannari Amman Sugars jumped 5.8% to its highest since December 4.
Vedanta rose the most since October 21, while Hindalco Industries, an aluminium maker, added 2.3%. The stocks were the biggest gainers on the Sensex. Tata Steel rose 1.7%. Sun Pharmaceutical Industries, the most valuable drugmaker, rose 2%, the first advance in three days.
Godfrey Phillips soared 11% to a record. The stock has almost doubled since October 1. ITC added 3.2%, the second-biggest gainer on the Sensex yesterday. VST Industries increased 7.6%. Golden Tobacco, which makes Panama brand of cigarettes, soared 20% to take its gain since October 1 to 58%.
Tobacco companies’ shares rallied amid speculation they will benefit if the government is able to pass the goods-and- services tax bill. Finance minister Arun Jaitley said the government has the votes to win approval for the bill. The tax, one of the nation’s biggest economic reforms in decades, could be rolled out anytime next year after it’s approved, Jaitley said in an interview with Bloomberg TV India. Modi’s opponents have blocked the measure in the upper house of parliament.
“Tobacco companies will be the biggest beneficiaries if the GST bill is passed as there will be clarity on taxes,” K Subramanyam, co-head of equity advisory at Altamount Capital, said in an interview. The GST levy on tobacco “will be lower than current taxes that differ across Indian states.”
International investors sold a net $143mn of Indian stocks on November 16, reducing this year’s inflows to $4.1bn. The Sensex has fallen 6% this year and trades at 15.2 times projected 12-month earnings, compared with a multiple of 11 for the MSCI Emerging Markets Index.
Meanwhile the rupee fell, snapping a three-day gain, on speculation outflows from emerging markets will increase as a probable quickening in the pace of US inflation strengthens odds of the Federal Reserve raising interest rates as soon as next month.
Consumer prices in the US rose 0.2% in October from the previous month, compared with a 0.2% decline in September, according to the median estimate in a Bloomberg survey. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 peers, headed for a third day of gains.
Futures show a 68% chance the Federal Open Market Committee will announce a rate increase by December 16, up from a 50% probability at the end of October. Foreign funds pulled $341mn from Indian shares last week, exchange data show.
“The Fed meeting is the next big event on the horizon,” said Rohan Lasrado, the head of foreign-exchange trading at RBL Bank in Mumbai. “Markets will now be keenly watching the US consumer-price inflation data due later today and capital inflows for direction.”
The rupee slipped 0.1% to 66.0350 a dollar in Mumbai, according to prices from local banks compiled by Bloomberg. It had strengthened to as much as 65.9050 earlier after data showed the country’s trade deficit narrowed to the least since February.
Exports dropped 17.5% in October from a year earlier, while imports fell 21.2%, according to figures released after financial markets closed on Monday. That resulted in a $9.8bn shortfall.
Government bonds fell for a second day, pushing the yield on the notes due May 2025 up two basis point to 7.67%, prices from the Reserve Bank of India’s trading system show.