Sensex swings between gains, losses HDFC advances

Indian stocks swung between gains and losses. Housing Development Finance Corp. rose to a record. Sterlite Industries (India) Ltd. declined.

The BSE India Sensitive Index, or Sensex, fell 0.2 per cent to 19,380 at 1:11 pm in Mumbai, after changing directions at least 11 times. Volumes in the gauge were 20 per cent lower than the 30-day average at this time of the day, data compiled by Bloomberg show. Mortgage lender HDFC jumped two per cent, bound for its highest-ever close. Sterlite, the biggest copper maker, fell after surging 17 per cent in the past two weeks.

Prime Minister Manmohan Singh’s government secured a December 7 vote in parliament on allowing foreign investments in the nation’s retail industry, fueling expectations it will move ahead with further reforms. The Sensex has risen 6.1 per cent the past three weeks as data showing economic growth slowed last quarter to match a three-year low stoked speculation the government will take more steps to boost growth and investment.

“I’m optimistic of an accelerating economy in 2013, and to some extent the low base of 2012 helps that case,” Adrian Mowat, chief Asian strategist at JPMorgan Chase & Co. in Hong Kong, told Bloomberg TV India on Monday. “Companies postponing investment decisions will begin to implement these decisions partly due to building economic momentum and partly due to a constructive policy framework.” JPMorgan said Nov. 19 that Indian stocks are its top selection among the so-called BRIC nations next year.

HDFC advanced two per cent to Rs 855.25, headed for the highest close. Wipro Ltd., the third-biggest software exporter, rose one per cent to Rs 384 after agreeing to pay $144 million for LD Waxsons Group, a producer of fast-moving consumer goods. Sterlite dropped two per cent to Rs 110.8. The stock on Dec. 6 rose to an eight-month high.

‘Attractive Opportunities’
The broader BSE Mid-Cap Index increased 0.4 percent to 7,094.95, bound for the highest level since April 28, 2011, data compiled by Bloomberg show. The 246-member measure trades at 14.2 times estimated earnings. The NSE CNX Smallcap Index added 0.3 per cent to 3,738.6 in 13th day of gains, on course for its longest winning run since January 2004, the data show.

“Investor focus is beginning to increasingly shift to mid- and-small caps,” Deven Choksey, managing director at KR Choksey Shares & Securities Pvt. in Mumbai, said by telephone. “There are a lot of attractive opportunities in that space.”

The Sensex rallied to a more than 19-month high on Dec. 6 on speculation parliament will endorse government policies to boost growth and investment. Singh in September opened airline and retailing to foreigners, and pared fuel subsidies in a wave of policy making aimed at reviving economic growth and averting a downgrade of India’s credit rating.

The 30-stock gauge trades at 15.9 times estimated profit, the highest since February, compared with the MSCI Emerging Markets Index’s 11.8 multiple. The Indian measure’s 14-day relative strength index, a measure of how rapidly prices rose or fell during the period, has been above 70 for the past six trading days, the level some traders use as a signal to sell.

The S&P CNX Nifty Index on the National Stock Exchange of India Ltd. fell 0.1 per cent to 5,899.05. Its December futures traded at 5,947.

Overseas funds bought about $393 million of Indian stocks on Dec. 6, taking net purchases in 2012 to $20.9 billion, the most among 10 Asian markets tracked by Bloomberg, excluding China, data compiled by Bloomberg show.