Tata Steel Leads Gain in India's Sensitive Index to Highest in 2 1/2 Years

India’s benchmark stock index extended gains for a second day from the highest level in more than 2 1/2 years amid expectations domestic companies will benefit from spending aimed at bolstering the U.S. economy.

Tata Steel Ltd., the nation’s biggest producer of the alloy, led metal producers higher after U.S. President Barack Obama proposed a $50 billion spending plan. Idea Cellular Ltd. jumped the most in more than six weeks after Emirates Telecom Corp. said it may invest in the phone company.

The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 60.00, or 0.3 percent, to 18,620.05 at 11:01 a.m. in Mumbai, set for its highest close since February 2008. The S&P CNX Nifty Index on the National Stock Exchange gained 0.4 percent to 5,596.90. The BSE 200 Index added 0.5 percent to 2,395.01.

“With the domestic growth outlook intact, the U.S. plan stands to benefit local companies by boosting demand and appetite for riskier assets like stocks,” said R.K. Gupta, who manages equities at Taurus Asset Management in New Delhi. He declined to say how much he manages or what he’s buying and selling.

Tata gained 0.8 percent to 580.35 rupees. Obama yesterday called for a six-year program to fix roads, railways and modernize the air-traffic control system. Steel Authority of India Ltd., the nation’s second-biggest producer, rose 1.2 percent to 198 rupees.

Idea Cellular

Idea Cellular jumped 4.6 percent to 75 rupees, on course for its highest close since July 23. Emirates Telecom, the United Arab Emirates’ largest phone company known as Etisalat, is considering investing in Idea Cellular to expand its business in the world’s second-biggest wireless market.

Overseas funds bought a net 4.86 billion rupees ($104 million) of Indian equities Sept. 3, raising total investments in the stocks this year to 610.8 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.

To contact the reporter on this story: Hemal Savai in Mumbai at at hsavai@bloomberg.net.

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