India’s Stocks Rise for Second Day; Housing Development Gains

Bloomberg---India’s benchmark stock index rose for a second day as investors judged recent declines in some stocks as overdone relative to their earnings outlook.

Housing Development Finance Corp., the nation’s biggest mortgage lender, climbed for the first day in five. Hindalco Industries Ltd., the largest aluminum producer, advanced 2.9 percent, after metal prices increased.

“Valuations in some stocks look attractive after the recent correction,” said Deven Choksey, chief executive officer at K.R. Choksey Shares & Securities Pvt., which manages about $125 million in assets. “Stock selection is important.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 155.93, or 0.8 percent, to 19,664.82 at 2:52 p.m. in Mumbai. Companies on the gauge are valued at 18.6 times their estimated earnings, compared with a recent peak of 20.1 times on Nov. 5. The measure swung between gains and losses at least nine times, falling as much as 1 percent. The S&P CNX Nifty Index on the National Stock Exchange gained 0.8 percent to 5,901.50. The BSE 200 Index increased 0.9 percent to 2,446.76.

Housing Development rallied 3.6 percent to 693 rupees, after losing 5.1 percent in the previous four trading days amid concern narrowing net interest margins may slow profit growth.

Hindalco advanced 2.9 percent to 221.6 rupees. Aluminum rose 1.2 percent in London, pacing gains among metal prices, after China refrained from raising borrowing costs, boosting speculation demand in the world’s fastest-growing major economy can be sustained. Tata Steel Ltd., India’s biggest producer of the alloy, gained 1.9 percent to 630.65 rupees.

ITC Falls

ITC Ltd. declined 1.8 percent to 167.25 rupees. The nation’s largest cigarette maker will resume output only after the government clarifies its direction on warnings on packets, the Business Line reported, citing Chairman Y.C. Deveshwar. Nazeeb Arif, a spokesman for the company, declined to comment on the report. ITC, which last year got 66 percent of sales from the product, closed its five cigarette plants on Dec. 1.

“If the factories don’t start soon, they could have some volumes which would be lost,” said Ajay Thakur, an analyst at Alchemy Share & Stock Brokers Pvt. “The company had some buffer stock, but that’s due to be exhausted soon.”

Foreign funds have been net sellers of the nation’s shares for three consecutive days, the longest stretch since May 26. Overseas investors sold a net 12 billion rupees （$265 million） of Indian shares on Dec. 9, paring this year’s record inflows in equity to 1.31 trillion rupees, according to data on the website of the Securities and Exchange Board of India.