India stocks swing between gains, losses before EU summit

Indian stocks swung between gains and losses before European Union leaders begin a summit to tackle the debt crisis in the region, India’s biggest trading partner, and before stock index futures expire tomorrow.

State Bank of India, the country’s biggest lender by market value, fell to the lowest in two weeks. Infosys Ltd, the second-largest software exporter, advanced to a one-week high. The BSE India Sensitive Index, or Sensex, was little changed at 16,961.76 at 2:44 pm, after swinging between gains and losses three times.

Euro-area finance ministers set the stage for today’s gathering in Brussels of the European Union’s 27 chiefs, approving Cyprus’s bailout and detailing how they would aid Spanish banks. Consensus has broken down on measures to protect governments in Spain and Italy, with German Chancellor Angela Merkel rejecting joint euro-area bonds as a means of lowering their borrowing costs. Rollovers in Nifty futures were at 52.4 percent yesterday, less than the six-month average of 55.06 percent, according to a note today from Axis Securities & Sales Ltd, a unit of India’s third-largest private lender.

“Investors are looking to reduce risk in their portfolio as they’re not sure about how Europe will play out,” Kishor Ostwal, managing director at CNI Research Ltd., said in a phone interview today.

The Sensex has fallen two per cent since the end of March and is on course for its fifth quarterly decline in six. The gauge has slumped 7.8 per cent from this year’s high on February 21 on concern slowing economic growth will hurt corporate profits. The Sensex trades at 13.3 times estimated profit, compared with the MSCI Emerging Markets Index’s 9.9 multiple.