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Indian Stocks Climb for Second Day Before Fed as Unilever Gains

By Rajhkumar K Shaaw

Indian stocks rose for a second day as emerging-market equities rebounded from a six-year low before the U.S. Federal Reserve’s decision on interest rates.

Sun Pharmaceutical Industries Ltd., the nation’s most valuable drugmaker, rose to a one-week high after it agreed to sell a manufacturing unit in the U.S. Hindustan Unilever Ltd., the biggest home-products maker, rallied to a three-month high. Oil & Natural Gas Corp., the largest state explorer, rose from its lowest price since May 2009

The S&P BSE Sensex climbed 0.7 percent at the close, after changing direction at least six times. The Federal Reserve begins its two-day meeting on Tuesday, with traders pricing in 76 percent odds that rates will be raised for the first time in almost a decade. A rout in oil will help outweigh the impact of the Fed’s decision on India, which imports 80 percent of its energy needs, according to AdviseSure Ventures Pvt.

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India VIX Posts Second Weekly Decline as Options Demand Weakens

By Santanu Chakraborty

The benchmark gauge of Indian equity-option costs declined for a second week, reflecting weaker demand for protection against market swings and uncertainty.

The India VIX Index gained 0.4 percent to 15.9 at the close in Mumbai, paring the measure’s weekly loss to 10 percent. The Nifty 50 Index posted its first weekly advance in four weeks after a government panel recommended a nearly 24 percent increase in salaries and allowances of federal employees.

Subdued demand for call and put options shows traders are looking ahead to the Reserve Bank of India’s interest-rate decision and the U.S. non-farm payrolls data, scheduled for next month, according to Abhimanyu Sofat, the Mumbai-based co-founder of AdviseSure Ventures Pvt., an investment advisory firm.

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Indian Stocks Climb Paring Sensex's First Annual Drop in 4 Years

By Rajhkumar K Shaaw

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 Ltd., the largest mobile-phone operator, advanced for a second day this week. Maruti Suzuki India Ltd. extended this year’s advance to 39 percent, the best performance on the S&P BSE Sensex.

“Stocks rallied amid short-covering before the expiry," Abhimanyu Sofat, the Mumbai-based co-founder of AdviseSure Ventures Pvt., an investment advisory firm, said by phone. “Funds also propped up their asset values to show better annual returns."

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Tata Steel Options Costs Surge as Loss Consensus Eludes Analysts

By Swansy Afonso and Santanu Chakraborty

The cost of Tata Steel Ltd. stock options jumped to a five-month high, signaling investors were hedging their bets amid the uncertainty surrounding the size of the fiscal third-quarter loss that India’s biggest producer of the alloy will probably report on Thursday.

Group net loss estimates for the three months ended Dec. 31 from 20 analysts compiled by Bloomberg range from a loss of 6.8 billion rupees ($100 million) to 17.1 billion rupees. Sales may drop 15 percent to 283.4 billion rupees, according to the average forecast in the survey.

“The wide range of estimates indicate the degree of uncertainty of when the steel sector may revive,” Chakri Lokapriya, the Mumbai-based chief investment officer at TCG Advisory Services Pvt., which manages about $3 billion in assets worldwide, said by phone. “We will wait by the sidelines.”

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Sensex Drops After Biggest Gain in Year as State Bank Retreats

By Santanu Chakraborty

Indian stocks slumped after the benchmark gauge’s steepest rally in a year Monday failed to assure investors the worst was over for equities and foreign funds remained sellers.

State Bank of India was the worst performer on the S&P BSE Sensex after chairman Arundhati Bhattacharya said bad loans are likely to increase next quarter and may affect profits. Larsen & Toubro Ltd. fell after its steepest gain in six years, while Tata Motors Ltd. tumbled 5.1 percent. Coal India Ltd., the world’s largest miner of the fuel, dropped after surging 7 percent on Monday.

“Yesterday’s rally was due to short-covering in an otherwise bear market, and investors are still not sure of the direction,” Abhimanyu Sofat, Mumbai-based co-founder of AdviseSure Ventures Pvt., an investment advisory firm, said by phone. “It is still a sell-on-rally market. I would like to see more stability before telling clients to bottom-fish.”

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