Indian stocks jumped in the last hour of trade, helping the benchmark gauge pare its first annual retreat in four years.
Housing Development Finance Corp, the biggest mortgage lender, rose the most in three weeks. Bharti Airtel, the largest mobile-phone operator, advanced for a second day this week. Maruti Suzuki India extended this year’s advance to 39%, the best performance on the S&P BSE Sensex.
The Sensex added 0.6% in Mumbai after changing direction at least a dozen times as the December derivatives contracts lapsed. The gauge slid 5% this year, after rising 30% in 2014, as the euphoria over Prime Minister Narendra Modi’s economic agenda waned and concern grew that tighter US monetary policy will curb the appeal of higher returns offered in emerging markets. Global investors bought $3.2bn of Indian shares in 2015, the smallest inflow in four years.
“The rout in commodities and the anticipated Fed rate increased led to constant outflows from emerging markets this year,” Vaibhav Sanghavi, managing director at Mumbai-based Ambit Investment Advisors, said in an interview. “2016 is likely to better as we may see commodities stabilising with the US and Europe chipping in better growth numbers and China taking measures to boost its economy.” Sanghavi said he’s bullish on consumer discretionary, financial-services and industrial companies.
Housing Development Finance surged 2.4%, the most since December 10. Bharti Airtel rose 2.2% to pare the yearly loss to 3.5%. Maruti Suzuki added 0.8% to cap its fourth annual increase. The stock surged 89% in 2014.
GAIL India, the largest natural-gas supplier, rallied to its highest level since July 7.
Bharat Heavy Electricals, the biggest power-equipment maker, and Tata Steel were this year’s worst performers on the Sensex, falling at least 35%.
Materials companies have seen the steepest losses among 10 industry groups on the MSCI India Index in 2015, sliding 21%, as copper producer Vedanta lost more than half its value amid sliding metal prices. Health-care companies added 7%, the biggest increase on the gauge.
Smaller companies have performed better than those on the Sensex this year, with the S&P BSE Midcap rallying 10% and the S&P BSE Smallcap gauge gaining 6.1%.
The Nifty 50 Index surged 0.6% to 7,946.35 to its highest level since December 1. The gauge fell 4.1% in 2015 and yesterday’s advance helped it erase this month’s loss.
“Stocks rallied amid short-covering before the expiry,” Abhimanyu Sofat, the Mumbai-based co-founder of AdviseSure Ventures, an investment advisory firm, said by phone. “Funds also propped up their asset values to show better annual returns.”
International investors sold a net $2.7mn of local stocks on Wednesday. The Sensex trades at 15.6 times projected 12-month earnings, compared with a multiple of 10.9 for the MSCI Emerging Markets Index. The Indian gauge retreated 0.1% in December, a second straight monthly loss.