Indian stocks rebound from 3-month low
ICICI Bank surged the most in a year after CEO allayed concerns over bad loans
Indian stocks advanced, with the benchmark index rebounding from a three-day loss, as ICICI Bank Ltd and Maruti Suzuki India Ltd rose on better-than-expected earnings.
ICICI Bank, the biggest private lender by assets, surged the most in a year after chief executive officer Chanda Kochhar allayed concerns over bad loans. Maruti rallied to a record and Bharat Heavy Electricals Ltd, the top power-equipment maker, rose the most in nine weeks. Bharti Airtel Ltd decreased for a third day ahead of its results which were expected yesterday.
The S&P BSE Sensex rose 0.5 per cent to 27,307.35 at 11.13am in Mumbai. The gauge has slid 2.3 per cent in April and is set for a second monthly loss amid concern corporate earnings growth will slow. The losses pulled down the index’s valuation to 15 times projected 12-month profits, the cheapest since January.
Valuation comfort
“The correction has provided some valuation comfort,” Chokkalingam G., managing director at Mumbai-based Equinomics Research Pvt, said in an interview with Bloomberg TV India. “Many large-cap stocks have fallen sharply from their recent peaks, and we could see more rebounds.”
ICICI jumped 6.2 per cent, the most since May 9. The lender tumbled to a six-month low on Monday after posting the lowest quarterly profit growth in five years as bad loans increased. The March quarter “was probably the peak in terms of restructuring and non-performing assets,” Kochhar said in a conference call.
“The ICICI management sounded very confident that their asset-quality issues have peaked,” Nitin Kumar, a Mumbai-based banking analyst at Prabhudas Lilladher Pvt., said by phone yesterday. “They also guided that loan growth will improve from here. These were the assurances that everybody was looking forward to.”
Maruti Suzuki rallied 3.4 per cent, taking the month’s gain to 13 per cent. Bharat Heavy surged 4 per cent. Tata Motors Ltd, owner of Jaguar Land Rover, climbed 2.2 per cent. NTPC Ltd, the top power producer, climbed 1.7 per cent.
Five of the seven Sensex members that have so far posted results for the March quarter have beaten or matched estimates. Bharti fell 0.3 per cent.
Its net income probably surged 54 per cent to Rs14.8 billion ($232 million; Dh853.7 million), according to the median of 17 analyst estimates in a Bloomberg survey. Idea Cellular Ltd, which also reports quarterly earnings, is projected to post a 41 per cent increase in profit to Rs8.31 billion, according to a separate Bloomberg survey. The shares rose 0.1 per cent.
Global investors sold a net $114 million of local shares on April 24, paring this year’s inflows to $8.3 billion. They purchased $16 billion of stocks last year.