May 25 (Bloomberg) -- India’s benchmark stock index advanced for a second day, led by Ranbaxy Laboratories Ltd. as its chief executive quit a month after the company forecast it would post a full-year loss.

Ranbaxy, the nation’s biggest drugmaker, gained 21 percent on news that CEO Malvinder Singh had stepped down. Sterlite Industries (India) Ltd., the No. 1 copper producer, rose 5.9 percent after metals prices surged in London.

Oil and Natural Gas Corp., the nation’s biggest oil exploration company, fell 0.5 percent, leading oil companies lower on concern the government would cap their profits. Bharti Airtel Ltd., the largest mobile-phone operator, slid 5.7 percent after saying it was in talks to buy a stake in South Africa’s MTN Group Ltd.

“We are positive on the long term,” said Mohit Mirchandani, head of equity investment at Taurus Mutual Fund in Mumbai, who helps manage $127 million in assets. “The market is a buy on dips; every correction will be bought into.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 26.07, or 0.2 percent, to 13,913.22. It swung between gains and losses at least 20 times. The S&P CNX Nifty Index on the National Stock Exchange was little changed at 4,237.55. The BSE 200 Index rose 0.8 percent to 1,697.56.

The Sensex is expected to remain volatile in the next one to two months, said Mirchandani, who predicted the index may rise or fall by as much as 10 percent during that time.

Ranbaxy jumped 21 percent to 267 rupees. Chief Executive Officer Malvinder Singh quit the company previously controlled by his family as its biggest shareholder Daiichi Sankyo Co. boosted efforts to turn around the drugmaker.

Metals Advance

Sterlite climbed 5.9 percent to 537.9 rupees. Hindustan Zinc, the nation’s largest producer of the metal, added 0.7 percent to 563.45 rupees.

A measure of six metals traded on the London Metals Exchange, comprising copper, aluminum, lead, tin, zinc and nickel, gained 2.7 percent.

Oil and Natural Gas fell 0.5 percent to 1,040.65 rupees. Cairn India Ltd. slid 4.1 percent to 213.45 rupees. Oil & Natural Gas and Cairn face limits on their earnings as the new government plans to impose a cap on crude oil producers’ profits, the Economic Times reported.

Indian Oil Corp., the nation’s biggest refiner, rose 8.7 percent to 566.05 rupees, the highest in more than 16 months on speculation the new government will relax curbs on fuel pricing, boosting profits. State-run refiners get bonds from the government and discounts from oil producers to partially compensate them for selling fuels below cost to curb inflation.

Bharat Petroleum Corp., the second-largest state-run refiner, rose 4 percent to 465.25 rupees. Hindustan Petroleum Corp. added 5.6 percent to 338.95 rupees.

Merger Talks

Bharti Airtel, India’s largest mobile-phone operator, fell 5.7 percent to 810.35 rupees after saying it is in talks to buy 49 percent of South Africa’s MTN Group, the first step in a potential $23 billion merger of the two companies.

As part of the deal, MTN and its shareholders may buy 36 percent of Bharti, the New Delhi-based company said in an e- mailed statement today.

ITC Ltd. rose 3.4 percent to 189.8 rupees. India’s No. 1 tobacco company posted a 10 percent increase in fourth-quarter profit on higher prices of cigarettes.

To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net.

Last Updated: May 25, 2009 07:45 EDT