Sensex narrows weekly loss as Fed rate-hike bets decline

Mumbai: Indian equities climbed the most in 10 days, led by automakers, as Asian stocks ended a six-day run of losses after investor expectations for an US interest-rate increase eased and foreigners turned buyers of local shares for the first time in four days.

The gains helped the S&P BSE Sensex and the NSE Nifty 50 Index pare this week’s loss, the first in three weeks. Reports on Thursday showed US factory output fell more than forecast, while retail sales unexpectedly slid, sending the odds for a rate increase from the Federal Reserve next week to below 20%. The chance of an increase in borrowing costs this year has slipped below 50 percent for the first time in a month.

The broader NSE Nifty ended 0.43% higher at 8,779.85, after rising as much as 1.20% earlier in the session, while the benchmark BSE Sensex closed up 0.66% at 28,599.03, after gaining up to 1.29% earlier in the day.

“Data shows that the US economy is still weak and a rate hike can happen only later,” said C.A. Rudramurthy B.V., head of research at Vachana Investments Pvt. in Bengaluru. “There are no negatives for the Indian markets right now, except the recent uncertainty about the Fed hike. We expect the liquidity-driven rally to continue.”

Foreigners bought $52 million of shares on Thursday after pulling $210 million in the previous three sessions as demand for risk assets cooled amid concern central banks are reluctant to boost stimulus. Foreigners have bought $6.2 billion of Indian equities this year, the most in Asia after Taiwan and South Korea.

National Stock Exchange of India Ltd (NSE)

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