Overseas funds bought the most Indian equities in five weeks on speculation slowing wholesale- price inflation and falling commodity prices will spur the central bank to cut interest rates next week.
Foreigners bought $292.1 million more of local stocks than they sold last week, the most since the period ended March 15, data from the nation's market regulator showed. The purchases bolstered this year's net inflows to $10.6 billion, the second- largest amount among 10 Asian markets tracked by Bloomberg, behind Japan.
India's S&P BSE Sensex posted its steepest advance in more than four months last week, as data showed wholesale price growth slowed to a 40-month low in March. Brent oil slid below $100 a barrel for the first time since July last week and gold fell the most since 1983, reducing import costs for the two commodities that fuelled India's record current-account gap in the last quarter of 2012. The country ships in more than 80 per cent of its oil and is the world's largest bullion buyer.
Another rate cut would help revive economic growth, Finance Minister P Chidambaram said in an interview from Washington, where he was attending meetings of the International Monetary Fund and the World Bank. Chidambaram also met investors in the US and Canada, in a bid to woo capital to fund the current account deficit.
Foreigners bought $292.1 million more of local stocks than they sold last week, the most since the period ended March 15, data from the nation's market regulator showed. The purchases bolstered this year's net inflows to $10.6 billion, the second- largest amount among 10 Asian markets tracked by Bloomberg, behind Japan.
India's S&P BSE Sensex posted its steepest advance in more than four months last week, as data showed wholesale price growth slowed to a 40-month low in March. Brent oil slid below $100 a barrel for the first time since July last week and gold fell the most since 1983, reducing import costs for the two commodities that fuelled India's record current-account gap in the last quarter of 2012. The country ships in more than 80 per cent of its oil and is the world's largest bullion buyer.
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"India will benefit from the lower oil prices as it is a net importer of oil and the drop in gold, given that they are heavy importers, will help the current-account deficit," James Thom, a fund manager at Aberdeen Asset Management Plc, said in a phone interview from Singapore on Friday. The shortfall in the nation's current account, together with a consumer-inflation rate that exceeds 10 per cent, has deterred the Reserve Bank of India from making further cuts to borrowing costs after 25 basis-point reductions in January and March. The central bank might reduce its key rate by another 25 basis points, or 0.25 percentage point, at a May 3 review, according to 14 of 16 economists surveyed by Bloomberg. The other two predict no change.
Another rate cut would help revive economic growth, Finance Minister P Chidambaram said in an interview from Washington, where he was attending meetings of the International Monetary Fund and the World Bank. Chidambaram also met investors in the US and Canada, in a bid to woo capital to fund the current account deficit.