Drugmakers Support India Stocks in Thin Trade Before Fed Meeting

(Bloomberg) -- Drugmakers and consumer-goods companies helped India’s stock gauges eke out gains in an otherwise choppy trading session as investors awaited central bank meetings in the U.S. and Japan.

The S&P BSE Sensex rose and fell by at least 0.2 percent as it switched direction more than 15 times, while volumes on the NSE Nifty 50 Index were 24 percent below the 30-day mean.

Indian equities have pulled back after rallying to an 18-month high last week as investors speculate on what’s in store at next week’s meetings at the Federal Reserve and the Bank of Japan. Global funds have bought $6.3 billion of the nation’s shares this year, the most in Asia after Taiwan and South Korea, as low interest rates in the U.S. and other developed countries stoke demand for riskier emerging-market securities.

Nifty 50+0.2%8,742.55
S&P BSE 100Little changed8,972.98
S&P BSE MidCap-0.3%13,092.11
S&P BSE SmallCap+0.3%12,745.83

“Markets are sluggish because of the uncertainty around the Fed meeting next week," K. K. Mital, vice president at Venus India Asset Management Ltd., said by phone from New Delhi. “Health-care stocks played catch-up as they didn’t participate in the recent rally.”

About $2 trillion has been wiped off the value of global equities over the past week amid signs major central banks were preparing to recalibrate monetary policy. While the odds of a U.S. interest-rate hike on Sept. 21 are 20 percent, the probability is 52 percent for a move this year.

Overseas funds have pulled $210 million from Indian shares in the past three sessions, keeping the benchmark indexes locked in a tight trading range.

  • Reliance Industries Ltd., owner of the world’s largest refining complex, was the best performer on the Sensex, rising 1.9 percent to a two-week high.
  • NMDC Ltd. fell 1.1 percent to 102.8 rupees after the state-run miner of iron ore said it will buyback shares at 94 rupees apiece. The stock has slid 10 percent in the past five sessions, the biggest loss for a similar period since March.  
  • Transformers & Rectifiers Ltd. jumped 4.9 percent after the company won a 1-billion rupee order from state-run Power Grid Corp.