Indian stocks advanced, tracking Asian and European peers, as investors waited for European Central Bank President Mario Draghi to give details of his plan to stem the region’s debt crisis.
The BSE India Sensitive Index, or Sensex, rose 0.2% to 17,346.27 at the close.
“Markets will wait for cues from policy meetings in Europe before making a decisive move,” Aneesh Srivastava, chief investment officer with Mumbai-based IDBI Federal Life Insurance Co, which has $470mn in assets, said by phone.
The Sensex has advanced 12% this year, helped by the highest foreign flows among 10 Asian markets excluding China tracked by Bloomberg. Overseas funds bought a net $54.5mn of stocks on Tuesday, taking their investment this year to $12.3bn, data from the market regulator show.
The 30-stock Sensex has slid 0.5% this week. It fell 2% last week, the most since the week ended May 11. The gauge trades at 13.7 times estimated earnings, compared with a multiple of 10.7 times for the MSCI Emerging Markets Index, which has advanced 2.9% in 2012.
India may attract as much as $40bn in two years from individual investors overseas after Prime Minister Manmohan Singh’s government allowed them to directly access Asia’s fifth-biggest stock market, Thomas Mathew, who took over as the joint secretary to President Pranab Mukherjee this week, said in a phone interview yesterday.
The rupee strengthened the most in two weeks, erasing earlier losses, on speculation the ECB officials would yesterday confirm measures to contain their region’s debt crisis.
The rupee advanced 0.5% to 55.6500 per dollar in Mumbai, the biggest increase since August 23, according to data compiled by Bloomberg.
Draghi favours unlimited purchases of government debt that will be sterilised to assuage concerns about printing money, two central bank officials briefed on the plan said.
From gulf times.