(MENAFN- Khaleej Times) Indian stocks advanced, with the benchmark index rebounding from its steepest four-day decline since July 2009, as some investors judged the losses excessive.
Tata Steel jumped 10 per cent, sending a measure of metal companies to its biggest gain in more than four years, after Nomura Holdings Inc. raised its outlook on the industry to overweight from underweight, citing a weak rupee. Sesa Goa jumped 13 per cent on being added to the benchmark index. Oil & Natural Gas surged from a nine-month low. Ranbaxy Laboratories , the largest drugmaker, soared 17 per cent.
The S&P BSE Sensex rallied 2.3 per cent to 18,312.94 at the close, the best performer among Asian indexes, with volume 64 per cent more than the 30-day average. The gauge slid about eight per cent in the past four days, the most since July 2009, amid concern measures to steady the rupee may curb economic growth. The currency touched a record low of 65.56 per dollar after the Federal Reserve minutes showed broad support for stimulus cuts.
The rally "smacks of bottom fishing," Dipan Mehta, a member of the BSE and the National Stock Exchange, told Bloomberg TV India today. "Nothing has changed and the rupee remains under pressure. This is just a technical rebound."
The four-day slide dragged the Sensex's 14-day relative strength index to 28.6 yesterday, below the 30 reading that signals the losses in the gauge may be poised to end, data compiled by Bloomberg show.
Metals Surge
Tata Steel rallied 10 per cent to Rs274.1, the steepest climb since May 20, 2009 and increasing this month's gains to 27 per cent. The stock closed at its lowest level since March 2009 on August 2. Improvements in the global economy and a weak rupee will boost profits at local metalmakers, Nomura analysts led by Prabhat Awasthi wrote in a note. The S&P BSE Metal index soared 8.2 per cent, the most since May 2009. The gauge has plunged 30 per cent this year.
Copper maker Sterlite Industries (India) , controlled by billionaire Anil Agarwal, surged 10 per cent to Rs87.3. Sesa Goa, an iron ore miner, will replace Sterlite Industries in the Sensex after its merger with the latter, the BSE said in a statement yesterday. Sesa jumped 13 per cent to Rs155.8. Hindustan Zinc , also controlled by Agarwal, jumped 9.1 per cent to Rs118.05.
Oil & Natural Gas jumped 7.6 per cent to Rs269.65, ending a four-day, 13 per cent slide. India's largest explorer will share Reliance Industries 's KG-D6 gas basin infrastructure, a move that will save it $700 million, Economic Times reported today. Reliance gained 2.9 per cent to Rs806.1.
Expatriated earnings
Tata Consultancy Services, India's largest software exporter, climbed 3.6 per cent to Rs1,778.95. Infosys added 2.1 per cent to Rs3,020.2. Sun Pharmaceutical Industries advanced 4.1 per cent to Rs502.2. Ranbaxy, which gets 79 per cent of its sales from abroad, surged 17 per cent to Rs386.2. Bharti Airtel , India's largest mobile-phone operator, rose 4.8 per cent to Rs313.
The rupee has weakened 15 per cent this year, boosting the expatriated earnings of software exporters and drugmakers that receive bulk of their sales from abroad. ۬
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