India's Sensex Posts Biggest Gain in Two Years on Rebound
(Bloomberg) -- India’s benchmark index rebounded, recouping a year-to-date advance, as some investors judged Thursday’s sell-off as excessive.
The benchmark S&P BSE Sensex Index rose 2.2 percent to close at 34,733.58 in Mumbai, its biggest advance in more than two years. The gauge had erased its year-to-date gain Thursday, despite posting its best weekly performance since July. On Friday, all except two of 19 sector sub-indexes compiled by BSE Ltd. ended higher, led by automakers and energy companies as the price of crude oil headed for the biggest weekly decline since May. Tata Consultancy Services Ltd., the nation’s biggest IT company, was the biggest laggard after reporting earnings.
“Some stocks are getting attractive,” after recent declines, Paras Bothra, president of research at Ashika Stock Broking Ltd. said. “However, investors remain cautious and are seeking more clarity on the outlook for corporate earnings and economic growth.”
The Sensex’s relative strength index dropped back below a threshold Thursday indicating potential overselling, after the gauge fell last week, sliding more than 10 percent from a peak in August.
Indian equities -- Asia’s top performers until recently -- have retreated amid a flurry of bad news, from surging oil prices and a slumping rupee to a rout in non-bank lenders following defaults at an infrastructure financier. Further erosion may affect flows to mutual funds, which have repeatedly buffered the nation’s $2 trillion market against the risk-off mood.
©2018 Bloomberg L.P.