India’s (SENSEX) benchmark stock index rose, paring its first monthly decline since August, as lenders and capital goods companies advanced before the government releases economic growth figures.
State Bank (SBIN) of India climbed to a one-week high. Bharat Heavy Electricals Ltd. (BHEL) gained for a second day, helping a gauge of capital goods makers rally for a third month on speculation victories for the opposition Bharatiya Janata Party in upcoming elections may lead to faster approvals for government-related projects. Gujarat-based Adani Enterprises Ltd. (ADE) rallied to its highest level since January.
The S&P BSE Sensex rallied 1.3 percent to 20,791.93 at the close, paring the month’s loss to 1.8 percent. Data today may show India’s economy probably expanded 4.6 percent from a year earlier in the quarter ended September versus 4.4 percent in the previous three months, according to a Bloomberg survey. CLSA Asia-Pacific Markets said this month the markets favor the BJP over the ruling Congress-led alliance.
“There is a possibility of the poll results favoring the market sentiment,” Gaurang Shah, assistant vice president at Geojit BNP Paribas Financial Services Ltd., said on Bloomberg TV India. “We are positive on the markets.”
State Bank added 3.2 percent, ending three days of losses. ICICI Bank Ltd. (ICICIBC), the nation’s second-biggest lender, surged 2.9 percent to 1,068.65 rupees, paring this year’s decline to 6.1 percent. Bank of Baroda jumped 4.8, the best performer on the S&P BSE India Bankex, which rose to its highest since Nov. 19.
Bharat Heavy rallied to a four-month high. Larsen & Toubro Ltd. (LT), the largest engineering company, climbed 2.3 percent, its sixth day of gains. Gujarat-based Adani Enterprises has doubled after falling to more than a four-year low on Sept. 4. The S&P BSE India Capital Goods Index has rebounded 42 percent from its lowest level since April 2009 reached on Sept. 3.
“There is expectation that a BJP-led government would fast-track project clearances, which will directly benefit infrastructure and capital goods companies,” Taher Badshah, co-head of equities at Motilal Oswal Asset Management Ltd., said by phone from Mumbai.
Last month, a Times Now and C-voter survey found an alliance led by the BJP under Gujarat Chief Minister Narendra Modi will top Prime Minister Manmohan Singh’s ruling coalition in the 2014 polls. Neither the BJP nor Singh’s Congress will be in a position to form a government on its own as both will fall short of a majority, the opinion poll showed.
Copper producer Sesa Sterlite Ltd. jumped 4.6 percent, the biggest gainer on the Sensex, while aluminum maker Hindalco Industries Ltd. (HNDL) added 1.1 percent.
The Sensex is up 7 percent this year, the best performer among the four largest emerging markets and trades at 13.6 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.7 times. The Indian gauge rose 2.8 percent this week, ending three weeks of losses.
Foreigners have bought a net $977 million of stocks this month, its third straight monthly inflow, even as they pulled a combined $1.96 billion from Philippines, Thailand and Indonesia this month, data compiled by Bloomberg show. Overseas investors have bought $17.3 billion of Indian shares this year, the most in Asia after Japan, the data show.
The CNX Nifty Index increased 1.4 percent to 6,176.10. The India VIX rose 3.2 percent.