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Tata Steel, State Bank Climb, Driving Sensex Index to Second Week of Gains

India’s benchmark stock index rose, extending gains for a second week, as Tata Steel Ltd.’s profit buoyed expectations that local corporate earnings can withstand any global economic slowdown.

Tata Steel, the nation’s biggest producer, climbed 1.4 percent after posting first-quarter net income from a year- earlier loss as it benefited from revived demand from automobile makers and engineering companies. State Bank of India, the nation’s largest, extended gains from a record after posting its fastest profit growth in four quarters.

“We have held on fine due to the good results,” said Anu Jain, vice president at Mumbai-based IIFL Private Wealth Management Ltd., which advises clients on investment strategies for assets worth $1.7 billion. “Anything that’s domestically driven isn’t at risk. Earnings of such companies will continue to be strong.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, gained 93.13, or 0.5 percent, to 18,167.03, advancing 0.1 percent this week. The S&P CNX Nifty Index on the National Stock Exchange rose 0.7 percent to 5,452.10. The BSE 200 Index increased 0.7 percent to 2,323.67.

Tata Steel advanced 1.4 percent to 527.2 rupees. Net income, including that of its U.K. unit Corus, was 18.3 billion rupees ($391 million) in the three months ended June 30, compared with a 22.1 billion-rupee loss a year earlier, the Mumbai-based company said yesterday in a statement.

State Bank

State Bank increased 2.4 percent to 2,850.25 rupees, extending yesterday’s 7.1 percent climb. ICICI Bank Ltd., India’s second-largest lender, rose 1.4 percent to 976.4 rupees after getting central bank approval to take over Bank of Rajasthan Ltd.’s business from Aug. 12. Bank of Rajasthan surged 5.8 percent to 201.05 rupees, its close highest in 15 years.

“We are very bullish on banks, they will continue to outperform,” said IIFL’s Jain.

Hindustan Copper Ltd., the largest miner of the ore, added 1.2 percent to 453.55 rupees after first-quarter profit soared to 262 million rupees from 2.3 million rupees a year earlier.

TVS Motor Co. gained 3 percent to 140.4 rupees. The third- largest motorcycle maker will this month resume production of the 125cc Flame motorcycle that was the subject of litigation with Bajaj Auto Ltd., the Business Line newspaper reported, citing Chairman and Managing Director Venu Srinivasan. Srinivasan didn’t pick up a call to his cell phone for comment on the report.

Overseas funds bought a net 1.93 billion rupees of Indian equities on Aug. 11, raising total investments in the stocks this year to 527.6 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:

ABG Infralogistics Ltd. (ABG IN) climbed 2.7 percent to 202.6 rupees. The port services company said its unit got an order to build a cargo berth at Tuticorin Port, a container terminal in southern Tamil Nadu state.

Essar Shipping Ports & Logistics Ltd. (ESRS IN) sank 8.4 percent to 109.55 rupees. The nation’s largest shipping company by market value said it will separate shipping and oilfield services businesses from the ports unit to accelerate growth in both divisions. Shareholders of Essar Shipping Ports will get one share of the new company for every three held.

Jet Airways (India) Ltd. (JETIN IN) surged 11 percent to 730.1 rupees. The nation’s biggest airline flew 28 percent more international passengers in July from with a year earlier, while domestic passengers increased 15 percent, it said a statement.

Power Finance Corp. (POWF IN) rose 1 percent to 332.1 rupees. The board of the state-owned lender to power projects approved selling as much as 20 percent of its equity in new shares and government holdings.

Texmaco Ltd. (TXM IN) gained 2.3 percent to 147.35 rupees. The maker of railway wagons and equipment may develop more than one million square feet of land in New Delhi that belongs to Birla Mills, the Times of India newspaper reported, citing Chairman Saroj Poddar. Texmaco’s Chief Executive Officer Ramesh Maheshwari couldn’t immediately be reached at his office telephone for comment on the report.

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

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