Stocks narrow weekly loss as Fed rate-hike bets decline

The gains helped the S&P BSE Sensex and the NSE Nifty 50 Index pare this week's loss, the first in three weeks

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 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 per cent. The chance of an increase in borrowing costs this year has slipped below 50 per cent for the first time in a month.
 

"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 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, data compiled by Bloomberg show.

Bajaj Auto and Hero MotoCorp were among the best performers on the Sensex, while Maruti Suzuki India rose for a third day to a record.

Infosys jumped to a one-month high, ending two days of losses. India's second-biggest software exporter said it will consider payment of an interim dividend on October 14 when it announces September-quarter earnings.

Reliance Industries, the owner of the world's largest refining complex, climbed to its highest price this year. Nava Bharat Ventures jumped the most in three months after Reliance Mutual Fund bought 3.97 million shares.

Indian Oil Corp rose two per cent after raising retail gasoline prices. Bharat Petroleum Corp added 1.7 per cent and Hindustan Petroleum gained the first time in five days.