India’s benchmark stock index rose to a 2 1/2 year high, led by steelmakers after JSW Steel Ltd. said it will consider raising funds, including selling shares to a strategic investor.
Tata Steel Ltd., the nation’s biggest producer of the metal, climbed 1.9 percent, and Jindal Steel & Power Ltd. gained 1.1 percent. JSW Steel Ltd., the third-largest producer, increased 2.7 percent, advancing for a sixth day.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, increased 135.92, or 0.8 percent, to 18,113.15, its highest close since February 2008. The gauge reversed an earlier decline after reports showed unexpected growth in Europe’s manufacturing and U.K. retail sales.
“Indian investors are looking at Europe and it’s doing very well at present,” said Vaibhav Sanghavi, a fund manager at Ambit Capital Ltd. in Mumbai. “It’s really about sentiment more than anything else.”
Tata Steel, the owner of Corus in the U.K., climbed 1.9 percent to 540.85 rupees. Jindal Steel rose 1.6 percent to 646.95 rupees. JSW Steel advanced 2.1 percent to 1,200.55 rupees. The company’s board will decide on its fund-raising plan at a meeting on July 27, the company said today in a statement to the Bombay Stock Exchange.
More Than Forecast
A composite index based on a survey of euro-area purchasing managers in both industries increased to 56.7 from 56 in June, London-based Markit Economics said today. Economists had projected a drop to 55.5, the median of 18 estimates in a Bloomberg survey showed. A reading above 50 indicates expansion.
In the U.K., retail sales rose more than economists’ forecast in June as the World Cup soccer tournament stoked purchases at electrical goods shops and department stores. The Sensex, the Stoxx Europe 600 Index, and Standard & Poor’s 500 Index reversed losses after the reports.
Dr. Reddy’s slid 1.7 percent to 1,380.7 rupees after its stock rating was cut by Morgan Stanley analysts Sameer Baisiwala and Saniel Chandrawat, who cited its outperformance, “full” valuations and a moderation in earnings drivers. Separately, India’s second-biggest drugmaker posted a 14 percent drop in first-quarter profit on weaker sales from North America and Europe, which last year accounted for more than half of its sales.
Overseas funds bought a net 3.72 billion rupees ($79.1 million) of Indian equities on July 21, raising total investments in the stocks this year to 407 billion rupees, according to the nation’s market regulator.
Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years ago in local currency terms, as the biggest advance in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline.
The following were among the most active on the exchange:
ACC Ltd. (ACC IN), India’s biggest cement maker, fell 1.1 percent to 816.15 rupees after second-quarter profit slid 26 percent to 3.59 billion rupees.
Bajaj Auto Ltd. (BJAUT IN), India’s second-largest motorcycle maker, advanced 3.2 percent to 2,490.5 rupees after saying it plans to give one free share for each one investors hold. Bajaj Auto also reported first-quarter profit doubled.
Coromandel International Ltd. (CRIN IN), a fertilizer producer, surged 3.4 percent to 508.9 rupees, the highest since at least 1991. The company’s first-quarter profit more than doubled from a year ago.
Mastek Ltd. (MAST IN), a software developer, sank 7.8 percent to 271.1 rupees, the most in three months, after saying fourth-quarter profit tumbled more than 90 percent from a year earlier.
Power Grid Corp. of India Ltd. (PWGR IN) rose 1.6 percent to 101.45 rupees, its steepest daily gain in a month, after India’s cabinet approved the sale of a stake in the state-run company.
United Breweries Ltd. (UBBL IN), owner of India’s biggest beer brand, surged 20 percent to 281.6 rupees. The stock posted its steepest advance in more than a year after first-quarter net income more than doubled.