(MENAFN- Gulf Times) Indian shares advanced after three days of declines, led by a rally in software exporters as an industry body forecast increasing sales.
India's benchmark Sensex index rose 0.42% or 141.27 points to 33,844.86. So far this year, Sensex has fallen 0.83%.
Tata Consultancy Services — the nation's biggest software firm — rose 3.3%, the index's steepest gain, after the National Association of Software and Services Companies forecast industry sales will rise 7 to 9% in constant currency terms in the fiscal year ending in March 2019.
Top drugmaker Sun Pharmaceutical Industries dropped 6.2%, the most in the index, as some investors fretted over the outcome of a US FDA inspection of one of its factories in western India.
'A positive market after three days of decline isn't surprising as there are always investors who will see value in some stocks after a slight correction, said Arun Kejriwal, founder of Kejriwal Research & Investment Services in Mumbai. 'We expect volatility to continue to stay high. The NSE Volatility Index has jumped 26% this year.
After one of the best rallies last year among major Asian equity indexes — boosted by record inflows from local and overseas investors — the Indian equity benchmarks are headed for their worst month in two years, following a rout in global stocks and as investors weigh the impact of a recently introduced tax on equities. The Sensex and the NSE Nifty 50 Index have each fallen more than 5% in February.
The Nifty 50 gained 0.4% yesterday. Eight of the 19 sector gauges compiled by BSE advanced, paced by the S & P BSE Information Technology Index's 2.2% gain.
Meanwhile the rupee closed little changed against the US dollar ahead of the Reserve Bank of India's (RBI) minutes for the latest policy meeting.
The home currency ended at 64.78, up 0.03% from its previous close of 64.79.
The local currency opened at 64.94 and touched a low of 64.94 a dollar, a level last seen on November 22. The 10-year bond yield closed higher for fourth consecutive sessions and hit a fresh two year high. Yield on 10-year government bond closed at 7.71% — a level last seen on February 26, 2016, compared to its Tuesday's close of 7.673%. Bond yields and prices move in opposite directions.
'The RBI committee's members views on the inflation outlook likely to be under close scrutiny (in minutes), Radhika Rao economist at DBS Bank said in a report.
Rao said the policy rates are likely to stay unchanged at the next meeting. She said shorter-tenor bonds are relatively more attractive and elevated yields are driven largely by tight liquidity.
'10-year bonds are likely to be much more volatile and we still see scope for yields to touch 7.9-8% in the coming quarters, Rao added.
Traders are also watching US Federal Reserve's meeting minutes to be released yesterday for more clarity on the central bank's rate hike path.
Year to date, rupee weakened 1.4%, while foreign investors have bought $1.20bn and $1.77bn in equity and debt markets, respectively.
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