Already a Bloomberg.com user?
Sign in with the same account.
Indian stocks swung between gains and losses as speculation global policy makers will take more steps to support growth overshadowed domestic budget concerns.
The BSE India Sensitive Index (SENSEX), or Sensex, added less than 0.1 percent to 17,767.81 at 9:55 a.m. in Mumbai, after changing directions at least five times. Reliance Industries Ltd. (RIL), owner of the world’s largest refining complex, rallied for the first time in six days. Jindal Steel & Power Ltd. (JSP) paced losses among its peers.
China’s Premier Wen Jiabao urged extra measures to support exports as evidence mounts that the nation’s slowdown is deepening. U.S. Federal Reserve Chairman Ben S. Bernanke said policy makers can take additional steps to boost the economy before they meet this week in Jackson Hole, Wyoming. India’s Finance Minister Palaniappan Chidambaram expressed concerns over the rising deficit at a meeting of the ruling coalition, Bloomberg TV India reported on Aug. 24.
“While global cues are conducive, delay on domestic policy reforms has offset the positive,” ICICI Bank Ltd. said in a report sent yesterday. “Expectations were fairly high from the government to deliver on its promise of fiscal reforms but there is yet to be much headway on this front.”
The Sensex has increased 15 percent this year, helped by the biggest overseas equity investments among 10 Asian markets tracked by Bloomberg. Foreign funds bought a net $72 million of stocks on Aug. 23, the 18th straight day of purchases, taking their investments in equities this year to $11.6 billion, data from the regulator show.
The Sensex trades at 14 times estimated earnings. While that’s lower than its three-year average multiple of 15.6, it’s higher than the MSCI Emerging Markets Index (MXEF)’s 10.9 times.
Foreign buying has helped counter domestics concerns over Prime Minister Manmohan Singh’s struggles to revive reform plans, open up the economy and curb inflation. Singh said on Aug. 15 India must treat measures to boost economic growth as a matter of national security, stoking speculation the government will boost efforts to revive its development agenda.
The budget gap may reach 6 percent of GDP if subsidies are not capped, Bloomberg TV India reported Chidambaram as saying. The government’s target is to pare the deficit to 5.1 percent this year from 5.8 percent in 2011-12 by keeping fuel and fertilizer subsidies at less than 2 percent of GDP.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at email@example.com
To contact the editor responsible for this story: Darren Boey at firstname.lastname@example.org