Market swings as metal makers advance, automakers drop

Indian stocks fluctuated as metal producers countered losses in software exporters and carmakers after the Sensex climbed to a four-month high on Monday.

Tata Steel Ltd surged the most on the S&P BSE Sensex after India's biggest producer of the alloy sped up the sale process of its unprofitable UK units. Vedanta Ltd and Jindal Steel & Power Ltd rallied at least eight per cent each after Credit Suisse Group AG raised Tata and Jindal Steel to outperform from underperform. Maruti Suzuki India Ltd, the maker of half the cars sold in India, and Tata Consultancy Services Ltd were among the top losers on the benchmark index.

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The Sensex added 0.1 per cent at the close in Mumbai after changing direction at least 12 times.

Indian equities have advanced in the past four trading sessions as retail inflation eased more than estimated and the weather bureau predicted above-normal rainfall. The gains made the Sensex's valuation the most expensive since October. Tata Consultancy Services and Infosys Ltd, the nation's top software makers, kicked off the March-quarter earnings season, reporting results that exceeded estimates.

"The markets is going to be range bound for some time," Ashish Kukreja, chief executive officer at Mumbai-based Craft Financial Advisors Pvt., said by phone from Mumbai. "With the results season on, we will see stock-specific movements. We don't see too much of a downside as the economic numbers are looking good." He's bullish on cement makers and health-care companies.

Tata Steel jumped 6.5 percent to 357.45 rupees, extending this year's gain to 38 percent. The company appointed Standard Chartered Plc as a second adviser to expedite the sale of its unprofitable units in the U.K.

Vedanta, the biggest copper and zinc producer, soared to its highest level since October 2015. Jindal Steel extended this month's rally to 24 percent. JSW Steel Ltd. climbed to a record, while Steel Authority of India Ltd. rose to a three-month high.

The worst for the steel sector is "clearly behind us," Credit Suisse said in a report. The brokerage lifted Tata Steel's price target to 440 rupees from 180 rupees.

Margin Narrows

Tata Consultancy Services fell the most since Feb. 11. Profit rose to 63.4 billion rupees ($952 million), beating the 62.8 billion-rupee mean of estimates compiled by Bloomberg, the company said after market hours on Monday. Still, profit margin before interest and tax was 26.1 percent versus the estimate of 26.9 percent compiled by Bloomberg, Nirmal Bang Equities Pvt. said in a note today. The margin narrowed about 50 basis points from the December quarter, the brokerage said.

"Margins are an issue," Craft's Kukreja said. "TCS was growing ahead of the industry but has now gone below it. The results don't look great when seen that way."

Crisil Ltd., the Indian unit of Standard & Poor's, soared 8.1 percent, the most since June 2014, after first-quarter net income of 786 million rupees exceeded the 696 million rupees estimated by analysts.

Reliance tumbled 2.6 percent, the most since March 10. Mahindra & Mahindra Ltd., India's largest maker of sport-utility vehicles and tractors, slid 1.1 percent. Maruti Suzuki India Ltd., the maker of half the cars sold in India, lost 1.3 percent.

Foreign investors bought $156 million of Indian equities on April 18, taking this year's inflows to $1.5 billion. The Sensex has gained 2 percent this month and trades at 15.9 times 12-month projected earnings, versus 12 for the MSCI Emerging Markets Index.