Indian (SENSEX) stocks swung between gains and losses, with the BSE India Sensitive Index poised to complete its biggest annual advance since 2009.
The Sensitive Index, or Sensex, was little changed at 19,449.38 as of 9:30 a.m. in Mumbai, after changing direction at least seven times. Wipro Ltd. (WPRO) headed for a six-month high after shareholders approved a demerger plan. Reliance Industries Ltd. (RIL) led energy companies higher. ITC Ltd. (ITC) paced declines among consumer-staple shares.
The Sensex has risen 26 percent this year, the most since an 81 percent surge in 2009, amid government steps to open the economy to offshore investment. Lower savings, “relatively high” inflation and moderating investment and consumption have boosted risks to the economy, the Reserve Bank of India said in its biannual Financial Stability Report on Dec. 28. Europe’s debt crisis and the so-called fiscal cliff in the U.S. offer “major downside risks” to global growth, the RBI said.
“Indian stocks have run up sharply on the back of global liquidity,” Rajendra Wadher, a director at PRB Securities Ltd., said in a phone interview today. “If liquidity tapers off or moves away to other markets due to the risks highlighted by the RBI, markets will correct in the near term.”
In the U.S., Congress worked with little more than a day remaining to avert more than $600 billion of tax increases and federal spending cuts. There were still “significant differences” between Democrats and Republicans, Senate Majority Leader Harry Reid said yesterday. The U.S. accounted for 11 percent of India’s exports in the six months to September 2011, commerce ministry data show.
Wipro, the third-largest Indian software exporter, jumped 1.5 percent to 397.8 rupees, poised for the highest close since July 3. Reliance rose 0.6 percent to 845.15 rupees, on course for its highest close since Oct. 5.
To contact the reporter on this story: Shikhar Balwani in Mumbai at email@example.com Rajhkumar K Shaaw in Mumbai at firstname.lastname@example.org;
To contact the editor responsible for this story: Darren Boey at email@example.com