Indian (SENSEX) equities climbed, with the benchmark index completing its biggest three-day gain since September 2011, amid purchases by foreign funds. Industrials and utilities led the advance.
The S&P BSE Sensex rose 0.9 percent to 19,577.39 at the close in Mumbai, after surging 2.8 percent, the most in 18 months, on June 28. Reliance Industries Ltd. (RIL), owner of the world’s largest refining complex, reached a five-month high. Engineering firms Larsen & Toubro Ltd. (LT) and Bharat Heavy Electricals Ltd. (BHEL) added at least 2.6 percent. Tata Power Co. (TPWR) and NTPC Ltd. (NTPC), the nation’s biggest generators, gained at least 2.5 percent.
Indian stocks, bonds and the rupee rallied on June 28 as the government agreed to raise natural-gas prices as part of a policy overhaul to revive an economy that grew at a decade-low rate of 5 percent in the year ended March 31. Overseas funds bought a net 11.2 billion rupees of shares that day, ending 13 straight days of outflows, provisional data from BSE Ltd. show.
“India is still a great long term story and when your currency has appreciated 25 percent against the rupee it gives a great entry point” for foreign funds, Andrew Holland, chief executive officer at Ambit Investment Advisors Pvt. in Mumbai, told Bloomberg TV India.
The rupee has climbed 2 percent from an all-time low of 60.765 per dollar reached on June 26 after Federal Reserve Chairman Ben S. Bernanke said June 19 the stimulus policies may end next year. The greenback has risen 6.5 percent against the rupee in the past year and 20 percent in the 12 months before that, data compiled by Bloomberg show.
Reliance, which has the second-highest weighting on the Sensex, advanced 2.7 percent to 885.7 rupees, the highest level since Feb. 4. Larsen jumped 3.1 percent to 1,451.65 rupees, a two-week high, and Bharat Heavy Electricals surged 2.9 percent to 179.25 rupees. Tata Power rose 2.7 percent to 88.65 rupees after the Press Trust of India reported the company raised its tariff 25 percent. NTPC rallied 3.1 percent to 148.15 rupees.
Tata Steel Ltd. (TATA) gained 2.5 percent to 280.7 rupees. The company plans to raise $1.2 billion selling stakes in some affiliated companies and will use the money to repay some of the debt raised for its 2007 purchase of Corus Group, The Sunday Times reported, citing a person it didn’t identify.
The 30-stock Sensex is valued at 13.1 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s 9.8 times. The Indian gauge’s valuation narrowed to 12.46 times on June 24, the cheapest since April.
Today’s gains came after overseas investors pulled $139 million from shares on June 27, a 13th day of net sales and the longest run of outflows in at least five years, data compiled by Bloomberg show. The regulator will release figures for June 28 and July 1 tomorrow as banks were closed to the public today.
Foreigners withdrew a net $1.76 billion from Indian stocks last month through June 27, the highest since the $2.1 billion pulled in August 2011, the data show.
The CNX Nifty Index on the National Stock Exchange of India rallied 1 percent to 5,898.85. Its July futures settled at 5,892.2. India VIX, which measures the cost of protection against losses in the Nifty, rose 0.8 percent.
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