Sensex Index Completes Longest Weekly Gains in Five Months on GDP Outlook

India’s benchmark stock index rose, extending its longest stretch of weekly gains in five months, after Goldman Sachs Group Inc. raised the economic growth estimate, citing the benefits of a better-than-forecast monsoon.

Mahindra & Mahindra Ltd. climbed to the highest in at least 19 years after saying monthly sales increased. Maruti Suzuki India Ltd., the biggest carmaker, advanced the most in more than a week after reporting monthly sales increased by a record. The nation’s economy will expand 8.5 percent this year, Goldman Sachs predicted.

“Consumer demand will remain strong,” said P. Phani Sekhar, a fund manager at Angel Broking Ltd. in Mumbai. “Foreign investors are finding India’s growth compelling.” Sekhar, who declined to say how much he manages, said he’s buying shares of Maruti Suzuki and Reliance Industries Ltd. among others.

The Bombay Stock Exchange’s Sensitive Index, or Sensex, gained 375.92, or 1.9 percent, to 20,445.04. The gauge, at its highest level since its January 2008 peak, completed a fifth straight week of gains. The S&P CNX Nifty Index on the National Stock Exchange rose 1.9 percent to 6,143.40. The BSE 200 Index increased 1.9 percent to 2,579.38.

Maruti

Mahindra increased 3.5 percent to 715.75 rupees, its highest close since at least January 1991. Vehicle sales climbed 24 percent last month, according to its e-mailed statement. Maruti gained 2.7 percent to 1,479.95 rupees, its steepest gain since Sept. 22. September sales climbed 30 percent to 108,008 vehicles, according to its e-mailed statement today.

“We expect Sensex company earnings to grow 20 percent to 22 percent in the September quarter,” Angel’s Sekhar said. Angel Broking has been ranked by Dun & Bradstreet as the brokerage with the biggest distribution network in the nation. The nation’s largest companies begin reporting earnings for the period from mid month.

India’s monsoon is set to be the best in three years, according to data from the India Meteorological Department. Goldman’s prediction for economic growth, increased from 8.2 percent, would be the fastest pace since 2008.

Reliance Industries, the most valuable company, increased 2.1 percent to 1,007.9 rupees. ICICI Bank Ltd., the country’s second-biggest lender, rose 2 percent to 1,135.2 rupees

Sterlite Industries (India) Ltd., the biggest copper and zinc producer, jumped 5.1 percent to 175.35 rupees. India’s highest court today said Sterlite can continue to operate its only smelter until Oct. 18, when it will hear an appeal against a Madras High Court order that the unit be closed.

Fund Flows

Sterlite, the best performer today on the 30-member Sensex, also gained with commodity prices after manufacturing increased in China, the world’s largest user of copper.

Hindalco Industries Ltd., the biggest aluminum producer, rose 3.7 percent to 204.35 rupees. Tata Steel Ltd., the biggest producer of the alloy, added 2.5 percent to 667.8 rupees.

Foreign fund inflows to India’s equities have increased 50 percent this year, making the benchmark index the most expensive in Asia and among the BRIC markets that also include Brazil, Russia and China.

Overseas funds bought a net 8.95 billion rupees ($198.3 million) of Indian equities on Sept. 28, extending this year’s record inflows to 843.6 billion rupees, according to the nation’s market regulator.

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

To contact the editor responsible for this story: Linus Chua at lchua@bloomberg.net